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IBM hands pinter division over

But Ricoh acquisition will be phased

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IBM plans to eventually offload its enterprise printing systems division to Japanese printer and copier vendor Ricoh. The two companies announced Thursday that they're forming a joint venture company based on the IBM unit, which will gradually become a fully owned Ricoh subsidiary.

Initially, Ricoh will acquire 51% of the joint venture, which will be known as the InfoPrint Solutions. Over the next three years, the Japanese company will gradually acquire the other 49% of the printing business to eventually own the entire operation.

The first part of the deal, forming the joint venture, is due to be completed in the second quarter of this year, subject to regulatory conditions.

Ricoh will pay IBM $725 million (£368m) in cash both for the initial 51% of the joint venture and as a prepayment for the other 49%. The final consideration for the transaction will be determined once the three-year period ends based on the profits and losses IBM and Ricoh sustain in running the joint venture.

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