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Associated Press IBM, LG Electronics to End Joint Venture 09.14.2004, 12:18 PM International Business Machines Corp. and LG Electronics Inc. will end an eight-year alliance that helped expand the U.S. computer maker's presence in the booming South Korean PC market. The joint venture formed by the two companies, LG IBM PC Co., said Tuesday it would dissolve itself by the end of the year. IBM owns 51 percent of the company, which manufactures and markets personal computers in South Korea. LG Electronics, which makes consumer electronics and home appliances, owns the remaining 49 percent. "Today's positive market conditions are favorable for IBM and LG Electronics to explore growth opportunities independently," said Kim Kwang Won, a spokesman at IBM Korea. "We believe this separation will bring better brand and market opportunities for both companies." The two companies said the separation was unrelated to a bribery case in which three officials of LG IBM as well as three from IBM's Korea unit were indicted earlier this year, charged with paying off government officials to win contracts to supply computer parts and services to state agencies and state-run businesses. Those six employees have since been fired because of their involvement in the case. Established in 1996, LG IBM opened a door for IBM to expand its presence in South Korea. IBM was looking to boost its network and personal-computer businesses. For LG, the deal offered an opportunity to gain expertise in the manufacturing of PCs, a new product for the company at the time. LG Electronics declined to comment on the announcement. But analysts said they didn't see the separation significantly affecting the bottom line of either company. Both companies said they plan to continue exchanging technologies and jointly implement large-scale projects in the Korean market. IBM Korea will sell its ThinkPad notebook PCs while LG Electronics will sell its Xnote notebook PCs after the split. On Tuesday, LG Electronics shares closed down 2.6 percent in trading on the Korea Stock Exchange. New York Stock Exchange-listed IBM shares traded midday Tuesday at $86.49, unchanged.  |
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