IBM Board of Directors Approves Separation of Kyndryl
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. 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.