SAN JOSE (Reuters) - Hitachi Ltd has agreed to pay $2.05 billion for IBM 's hard-drive operations and move them into a company under the control of the Japanese electronics giant, the companies said on Monday.
The two companies announced in April that they would collaborate in data-storage systems and form a joint-venture for hard-drives, a troubled business segment for IBM recently.
Hitachi will initially own 70 percent of the new company, which will be based in San Jose, California, and will take over full ownership in three years after a series of fixed payments to IBM.
Hitachi estimates that the new company, which will employ some 24,000 staff at 11 locations around the world, will deliver sales of about $5 billion in fiscal year 2003 with a target of revenues of $7 billion by fiscal 2006.
Hard disk drives, similar to other components for computers, have experienced slack demand and sharply reduced pricing in the past year. While IBM claims to have invented the hard disk drive, industry watchers have said the company have lost money in the business in recent years.