Media reports indicating IBM is pursuing a stake in a Chinese investment bank in partnership with Citigroup are rumor, spokesman says.
An IBM spokesman on Monday said that media reports indicating that the computing and tech services giant is pursuing a stake in a Chinese investment bank in partnership with Citigroup are "rumor and speculation." The spokesman declined further comment.
Reuters reported Monday that IBM is putting up a 5% stake as part of Citgroup's bid for control of the Guangdong Development Bank. The news agency attributed the information to unnamed sources that it said were familiar with the arrangement. IBM is one of the bank's main suppliers of computing systems.
Technology analyst Roger Kay said the move would make sense for IBM, as it would give the company a stake in a bank that's a major supplier of funds to Chinese businesses that IBM hopes will become big technology buyers as they grow. "It gives them a seat at the table," said Kay, of Endpoint Technologies, in an on-air interview with CNBC.
As part of its entry into the World Trade Organization, China must open its banking sector to foreign competition starting next month.
The investment would be consistent with other IBM moves of late. Last week, the company said it would launch a $180 million fund in partnership with Lehman Brothers to invest in midsize and mature Chinese companies. Earlier this year, IBM moved its head purchasing office from upstate New York to Shenzhen. IBM currently maintains a staff of about 7,000 in China, which boasts one of the world's fastest growing economies and has become a magnet for growth-challenged U.S. tech companies.
IBM also announced a minor acquisition on Monday. The company said it had acquired privately held Palisades Technology Partners for an undisclosed sum. The firm, based in Englewood Cliffs, N.J., has developed a Web-based lending management platform for the financial services industry.
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