PCD now independent in South Korea

eServer xSeries and ThinkPad and ThinkCentre businesses will go to IBM Korea - - XNOTE notebook and MultiNet desktop businesses will go to LGE

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Seoul, Korea - 14 Sep 2004: ... The Board of LGIBM PC Co. today announced it will dissolve the joint venture into its separate parent companies, LGE and IBM Korea, effective Jan. 1, 2005. The decision is subject to the satisfactory conclusion of an agreement between LGE and IBM Korea.

Established in November 1996 by the joint investments of LGE (49%) and IBM Korea (51%) with capital of 24.3 billion Korean Won, LGIBM PC Co. grew to become a leader in the Korean computer marketplace. However, over the past eight years the Korean marketplace has changed considerably. The Korean market is now open to international brands and economic conditions are very favorable for IBM and LGE to individually pursue growth opportunities. Therefore, it has been mutually agreed that both IBM and LG will be able to increase their market opportunity, improve business efficiency and better meet the needs of the Korean market by operating independently.

LGE and IBM Korea will commence transition in October and expect to complete preparations for the dissolution by the end of this year. During the transition period LGIBM will continue to operate and to meet customers needs. Sales networks for both LGE and IBM Korea will remain unchanged for customer services during the transition.

IBM Korea said, "Today's positive market conditions are favorable for IBM and LGE to explore growth opportunities independently. We believe this separation will bring better brand and market opportunities for both companies and benefit the Korean IT market as a whole. The incorporation of the PCD and xSeries business into IBM Korea will better enable IBM to be responsive to its client's computing needs."

LGIBM will be divided by its major products with each brand being incorporated back into the parent company that currently supplies the product. Therefore, the eServer xSeries brand and ThinkPad and ThinkCentre business will be incorporated into IBM Korea, and XNOTE and MultiNet business will be absorbed by LGE.

Regular LGIBM employees will be offered transfers to either IBM or LGE, depending on the brands they support. "Our top priority over the coming months is to ensure a smooth transition of employees into their new roles at either LGE or IBM Korea, and provide a smooth transition for customers and business partners," said an IBM spokesperson. "For customers, there will be no change to sales and after sales service agreements, which will be honored by each parent company.

IBM Korea and LGE, who enjoyed strong and mutually beneficial relations throughout the joint venture, will continue to exchange technologies for establishing international IT standards and will jointly implement large scale system integration projects in the Korean market.