IBM Pays Globalfoundries $1.5B to Take Chip Unit

IBM has agreed to pay Globalfoundries $1.5 billion over the next three years to take over its loss-making semiconductor business. IBM announced earlier this year that it was looking for a buyer for the chip unit and said that it was in talks with Globalfoundries as a potential buyer (Display Monitor Vol 21 No 7). However, negotiations between the two companies fell through in July when IBM rejected Globalfoundries’ offer as too low (Display Monitor Vol 21 No 30). The transaction is expected to close in 2015.

The news came as IBM released its third quarter results (see Finance Results in this issue) and announced a related pre-tax charge of $4.7 billion.