IBM's $2.05 billion sale of its hard drive assets to Hitachi has been approved by the Federal Trade Commission (FTC), according to the companies. Hitachi and IBM plan to combine their hard disk drive operations, forming a new company to be called Hitachi Global Storage Technologies with Hitachi owning 70 percent of the new entity.
The merged company, to be managed by an independent team of executives from Hitachi and IBM's existing hard drive operations, would be based in San Jose, Calif.
Corporate managing director of Hitachi Dr. Jun Naruse has been tapped as CEO for the new company with IBM's Douglas Grose to serve as chief operating officer. Grose is currently general manager of IBM's Storage Technology Division.
Hitachi gets to select the new company's board of directors, and IBM will not be involved in its operations.
The companies said the new organization would employ about 24,000 -- 18,000 from IBM and 6,000 from Hitachi -- with major manufacturing operations at 11 locations around the world.
Hitachi estimates the new company would account for approximately $5 billion in sales in fiscal year 2003, and will target annual sales of $7 billion by fiscal year 2006.
Hitachi and IBM previously received antitrust approval for the proposed transaction from the European Commission, the Japan Fair Trade Commission, Brazil's Conselho Administrativo de Defesa Economica (CADE) and Taiwan's Fair Trade Commission.
Hitachi and IBM are waiting to receive approval from one jurisdiction.