8-KOther EventsExhibits & Filings

INTERNATIONAL BUSINESS MACHINES CORP 8-K Report, Corporate Update (Oct 12, 2021)

Filed October 12, 2021For Securities:IBM

Summary

International Business Machines Corporation (IBM) announced on October 12, 2021, the definitive details for the spin-off of its Infrastructure Services business, Kyndryl Holdings, Inc. IBM stockholders will receive 80.1% of Kyndryl's outstanding shares as a pro rata dividend. The distribution ratio is one share of Kyndryl for every five shares of IBM common stock held by record holders on October 25, 2021. This strategic move aims to separate IBM's faster-growing hybrid cloud and AI businesses from its legacy IT infrastructure services, allowing each entity to pursue its own growth strategies more effectively. Following the spin-off, IBM will retain a 19.9% stake in Kyndryl, with plans to divest this remaining interest within 12 months. The Kyndryl dividend is scheduled to be effective on November 3, 2021. Investors should note that this transaction is subject to certain conditions and that forward-looking statements regarding the spin-off carry inherent risks and uncertainties, as detailed in IBM's and Kyndryl's SEC filings.

Key Highlights

  • 1IBM is spinning off 80.1% of its Infrastructure Services unit, Kyndryl Holdings, Inc., to IBM stockholders.
  • 2The Kyndryl spin-off will be executed as a pro rata dividend.
  • 3IBM stockholders will receive one share of Kyndryl for every five shares of IBM common stock they hold.
  • 4The record date for the Kyndryl distribution is October 25, 2021, with the dividend effective November 3, 2021.
  • 5IBM will retain a 19.9% stake in Kyndryl and plans to sell it within 12 months post-distribution.
  • 6This separation is intended to allow IBM to focus on its hybrid cloud and AI businesses.
  • 7The transaction is subject to the satisfaction or waiver of certain conditions.

Frequently Asked Questions

Kyndryl is IBM's former Infrastructure Services business. IBM is spinning it off to allow the company to focus on its core growth areas, specifically hybrid cloud and artificial intelligence, while Kyndryl operates as an independent entity to pursue its own strategic objectives in the IT infrastructure services market.

IBM stockholders of record as of the close of business on October 25, 2021, will receive one share of Kyndryl common stock for every five shares of IBM common stock they own. This will be distributed as a pro rata dividend.

Yes, IBM will initially retain a 19.9% ownership stake in Kyndryl. However, IBM has stated its intention to dispose of this remaining stake within 12 months following the distribution.

The record date for the distribution is October 25, 2021. The Kyndryl dividend distribution will be effective at 5:00 p.m. New York City time on November 3, 2021. IBM plans to sell its remaining stake within 12 months after this date.