Hitachi Ltd. announced Monday that it has completed the purchase of IBM Corp.'s hard-disk drive operation and launched the new HDD business unit Hitachi Global Storage Technologies Inc.
The new company, which combined IBM Corp.'s operation with Hitachi's sales operation in the U.S., is headquartered in San Jose, Calif., and began operations on Jan. 1. It produces HDDs ranging between 1 inch and 3.5 inches, according to Hitachi officials.
The firm is capitalized at $2.03 billion. Hitachi has a equity stake of 70 percent, which will be raised to 100 percent at the end of 2005, the officials said. IBM, which takes the remainder of the share, is not participating in the management of the new company, they said.
The HDD company has eight manufacturing bases in seven countries and sales outposts in 13 countries, according to Hitachi officials.
Under the framework accord reached between the two firms in June, the Japanese firm bought IBM's HDD operation for $2.05 billion.
Hitachi said it hopes to bolster its HDD business via the acquisition from IBM, the inventor of hard-disk drives. Demand is expected to grow for HDD in products such as mobile terminals, PCs and other consumer electronics products.