IBM’s board of directors approves Kyndryl’s split

ARMONK, NY – (COMMERCIAL THREAD) – IBM (NYSE: IBM) today announced that its board of directors has approved the previously announced separation of Kyndryl, the company’s managed infrastructure services business.

To effect the separation, IBM’s board of directors declared a pro-rata distribution to IBM shareholders of 80.1% of the outstanding shares of Kyndryl. Once distributed, each holder of IBM common shares will receive one Kyndryl common share for every five IBM common shares held on October 25, 2021, the date of registration of the distribution. The distribution is expected to occur after market close on November 3, 2021. It is expected that, for US federal income tax purposes, the distribution will be effected in a tax-beneficial manner to IBM shareholders in the United States. . Distribution is subject to certain conditions as described in the registration statement on Form 10 filed by Kyndryl.

IBM will retain 19.9% ​​of Kyndryl’s common shares, with the intention of exchanging those shares for IBM debt during the 12-month period following the distribution, subject to market considerations.

“Today’s announcement is an important milestone for IBM, its employees and shareholders as we enter a new era of growth,” said Arvind Krishna, president and CEO of IBM. “The separation of Kyndryl is a milestone in the continued evolution of IBM, a company now fully focused on delivering powerful hybrid cloud and AI solutions and capabilities to businesses around the world. ”

“Kyndryl has an important and exciting mission: to design, build and manage the technological infrastructure on which the world depends every day,” said Martin Schroeter, President and CEO of Kyndryl. “As an independent and focused service leader, Kyndryl will be at the heart of our customers’ progress. ”

Shareholders do not need to take any action to receive Kyndryl Common Shares to which they are entitled as an IBM shareholder. In addition, shareholders do not need to pay any consideration, or transfer or exchange IBM common shares to participate in the separation.

Forward-looking statements and cautions

Except for historical information and discussions contained herein, the statements contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current assumptions of the company regarding future business and financial activities. performance. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including, but not limited to the following: a downturn in the economic environment and customer spending budgets; failure of the company’s innovation initiatives; damage to the company’s reputation; risks associated with investing in growth opportunities; the inability of the company’s intellectual property portfolio to prevent competitive offers and the inability of the company to obtain the necessary licenses; the possibility that the proposed separation of the managed infrastructure services unit from the Company’s Global Technology Services segment will not be completed on time or at all, the possibility of disruption or unforeseen costs associated with the proposed separation or the possibility that the separation will not achieve the expected benefits; the company’s ability to successfully manage acquisitions, alliances and divestitures, including integration challenges, failure to meet goals, assumption of liabilities and higher debt levels; fluctuations in financial results; impact of local legal, economic, political, health and other conditions; the inability of the business to meet growth and productivity goals; ineffective internal controls; the company’s use of accounting estimates; impairment of goodwill or depreciable intangible assets of the company; the company’s ability to attract and retain key employees and its use of essential skills; impacts of relationships with critical suppliers; product quality problems; impacts of doing business with government clients; the use of distribution channels and third-party ecosystems; cybersecurity and data privacy considerations; the negative effects of environmental issues, tax issues; the risks of legal proceedings and investigations; company pension plans; currency fluctuations and customer financing risks; impact of changes in market liquidity conditions and customer credit risk on receivables; risk factors relating to IBM securities; and other risks, uncertainties and factors discussed in the Company’s 10-Q and 10-K Forms and other documents filed by the Company with the United States Securities and Exchange Commission or in documents therein. incorporated by reference. Any forward-looking statement in this press release speaks only as of the date on which it is made. Except as required by law, the company assumes no obligation to update or revise forward-looking statements.

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