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IBM Reported Studying Sale of Low-Tech Lines

July 18, 1990|From Associated Press

NEW YORK — International Business Machines Corp. is considering selling its low-technology businesses, which include former mainstays like electric typewriters and keyboards, according to a report published today.

The businesses could fetch about $3 billion through a proposed leveraged buyout, the Wall Street Journal said, quoting unidentified Wall Street and industry executives.

IBM has already been negotiating with a potential buyer and a deal could be worked out by the end of the month, the newspaper said.

In a statement issued today from its Armonk, N.Y., headquarters, the world's largest computer company said it "has not concluded any transaction like the one speculated on. IBM is in the process of considering many options as it moves to sharpen its strategic focus and remain on the leading edge of the information-processing business."

The computer giant added that any future action will not disrupt its "full-employment policy."

IBM has a tradition of no layoffs. When it sold businesses in the past, it has tried to allay employee fears of job losses.

Buyouts, however, are often followed by layoffs to cut costs and to help the acquirer repay the debt used in the purchase.

IBM has been paring its operations and payroll since the mid-1980s, when growth in the computer industry began to slow. In December, IBM announced another round of employee reductions through early retirement programs.

The company has also been looking for ways to get out of businesses considered marginal since the proliferation of desktop computers and other word-processing systems in the 1980s.

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