IBM has quietly put its Global Network Unit on the market, for a price of as much as $4 billion, claims a report in 'The Wall Street Journal' today. IBM has declined to comment.
According to the report, people familiar with IBM's plans said the company has hired Merrill Lynch to auction the network, which it expects to fetch in the region of $3-4 billion.
The Global Network, which grew out of IBM's internal phone system for its different outposts, is now one of the world's most widespread networks, transmitting corporate data for about 30,000 customer facilities in 900 cities across 50 countries.
Part of IBM's services unit, the Network employs about 6,000 people worldwide, and brings in IBM around $2 billion a year, 2.5 per cent of its revenues last year. Customers use it for, among other things, receiving electronic orders from their own customers, to connect employees to the Internet and email, and voice phone services.
While the network is believed to be very profitable, it is also expensive to maintain, with industry sources estimating IBM has to spend $200 million a year on upgrading it to keep up with other telecomms suppliers. The system is also coming under attack from rival alliances, such as the recently formed global networking alliance of AT&T and British Telecom.
Analysts believe IBM has therefore taken the decision to sell the Network, as it sharpens its focus on its core business units. IBM has already signalled its intent to sell its printer division, and has instructed Goldman Sachs to find a buyer.
A number of major telecomms companies are believed to have expressed an interest already in buying the Network.
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