ARMONK, N.Y.: IBM 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 the IBM board of directors declared a pro rata distribution to IBM stockholders of 80.1 percent of the outstanding shares of Kyndryl. Once distributed, each holder of IBM common stock will receive one share of Kyndryl common stock for every five shares of IBM common stock held on October 25, 2021, the record date for the distribution.
The distribution is expected to occur after close of market on November 3, 2021. It is intended that, for United States federal income tax purposes, the distribution will be conducted in a tax-efficient manner for IBM stockholders in the United States. The distribution is subject to certain conditions described in the registration statement on Form 10 filed by Kyndryl.
IBM will retain 19.9 percent of the shares of Kyndryl common stock, 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 a milestone for IBM, its employees and its shareholders as we enter a new era of growth,” said Arvind Krishna, IBM chairman and chief executive officer.
“The separation of Kyndryl is a significant step in the continued evolution of IBM, a company now squarely focused on delivering powerful hybrid cloud and AI solutions and capabilities to enterprises around the world.”
“Kyndryl has an important and exciting mission – to design, build and manage the technology infrastructure that the world depends on each day,” said Martin Schroeter, Kyndryl chairman and chief executive officer. “As an independent and focused services leader, Kyndryl will be at the heart of progress for our customers.”
Shareholders do not need to take any action to receive shares of Kyndryl common stock to which they are entitled as an IBM stockholder. Additionally, shareholders do not need to pay any consideration, or surrender or exchange shares of IBM common stock, to participate in the separation.
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