Hitachi to Buy EDS Stake in Hitachi Data

Hitachi Ltd. announced today that it will buy Electronic Data Systems (EDS) Corp.'s stake in Hitachi Data Systems Corp., which was formed by the two firms in 1989 to sell and service Hitachi mainframes and storage products.

The parent Hitachi company will assume full control over Hitachi Data Systems no later than April 21, Hitachi said in a statement. Terms of the agreement were not disclosed.

"The evolving nature of today's information systems marketplace dictated our action to assume full ownership of Hitachi Data Systems," Toshihiko Odaka, board director and group executive of Hitachi Ltd.'s computer products group, said in the statement. "With this agreement, we are now in a position to strengthen and broaden the resources and product mix of Hitachi Data Systems as a solution provider in North America."

Hitachi Data Systems announced layoffs of about 400 workers last November, which it said were necessary to help the company deal with reduced revenues as a result of plummeting prices in the IBM S/390-compatible mainframe market. At the time, the company said it was looking at entering the Unix and Windows NT server markets and selling more of its storage products through the indirect sales channel.

Hitachi Data Systems, based in Santa Clara, California, employs 2,300 people. The company can be reached at http://www.hds.com/.

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