IBM board approves Kyndryl spin-off

Distribution of Kyndryl shares is expected to occur on 3 November

IBM's board of directors has approved the previously announced separation of its managed infrastructure services business into a new company called Kyndryl.

The board has declared a pro rata distribution to IBM stockholders of 80.1 percent of the outstanding shares of Kyndryl as part of the approval which, once distributed, will see each holder of IBM common stock receive one share of Kyndryl common stock for every five shares of IBM common stock held on October 25.

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.

The distribution is expected to occur after close of market on 3 November.

"Today's announcement is a milestone for IBM, its employees and its shareholders as we enter a new era of growth," said Arvind Krishna, IBM chairman and CEO.

"The separation of Kyndryl is a significant step in the continued evolution of IBM, a company now squarely focused on delivering powerful hybrid cloud and AI solutions and capabilities to enterprises around the world."

The news follows Kyndrl announcing its own board of directors last month, with CEO Martin Schroeter set to lead the board as chairman while former Royal Bank of Scotland CEO Stephen Hester will serve as lead independent director.