IBM Corp. (NYSE:IBM) is suing its long-time vice president of corporate development, David Johnson, over his decision to jump to rival Dell Inc. (NASDAQ:DELL). Through a lawsuit filed in the U.S. District Court of Southern New York, the information technology giant is hoping to block Johnson's move based on a binding noncompete clause signed in 2005.
Here's IBM's statement:
"As former head of mergers and acquisitions for IBM, Mr. Johnson has possession of valuable confidential information of IBM and cannot undertake a senior strategy position at Dell without violating his obligations to IBM. Mr. Johnson repeatedly received significant compensation in exchange for agreeing to noncompete provisions, and IBM expects him to fulfill his obligations. IBM intends to go to court to enforce those obligations to the full extent permitted by law." According to IBM's court filing, "The actual and potential corporate transactions as to which Mr. Johnson has knowledge span the entire range of IBM businesses and product lines. ...and is in possession in IBM's most highly sensitive confidential strategic information." That information, wrote IBM, "is carefully guarded, not made accessible to the public or to IBM's competitors, and is disclosed even to IBM employees on a strict 'need to know' basis."
Johnson has presided over dozens of transactions in his 27 years at IBM, the last nine spent leading M&A and divestitures. That includes the 2005 sale of IBM's PC business to Lenovo Group Ltd. for $1.75 billion, and the $5 billion acquisition of Canadian software maker Congos two years later.
Of course, IBM's latest high-profile deal didn't happen. IBM was reportedly deep in negotations to acquire Sun Microsystems Inc. for $7 billion (NASDAQ:JAVA), before
talks broke down, reportedly over antitrust and exclusivity concerns. Oracle ultimately
swept in to acquire Sun for $7.4 billion.
What prompted Johnson's jump to Dell? We're hoping to speak with him directly to find out. In the meantime, as we noted in this May 9 post about
Dell's hunt for an M&A chief, Dell has about $9 billion in cash on hand and is looking to do deals. Whether Johnson can help the company put that money to work remains to be seen. -
Suzanne Stevens
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And the winners are...
Mostly it happens that when i company started drowning the high official tries to run away and find same position elsewhere.