IBM has announced plans to spin off its managed infrastructure business in a new company. This will allow IBM to focus on its software and services business, expanding further in hybrid cloud solutions since its takeover of Red Hat last year.
The new company (to be named later) will immediately be the world's leading managed infrastructure services provider. It counts over 4,600 customers in 115 countries, including more than 75 percent of the Fortune 100, and a backlog of USD 60 billion in business. The new company will be entirely focused on managing client-owned infrastructure, offering hosting and network services, services management, infrastructure modernization, and migrating and managing multi-cloud environments.
The separation will allow the company to partner more with other cloud providers as well as invest more in new equipment and services. The new company will maintain a strong strategic partnership with IBM and continue to serve existing and new clients.
IBM will not retain shares in the new company. These will be spun off pro rata to IBM's existing shareholders. The company pledged to maintain at least its current quarterly dividend level divided across the two companies following the separation. Completion of the deal is expected by the end of 2021, subject to final board approval, tax opinions and other regulatory obligations.
