WASHINGTON, D.C. 20549

                                    FORM 8-K

                 CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                        Date of Report: December 31, 2002
                        (Date of earliest event reported)

             (Exact name of registrant as specified in its charter)


      New York                          1-2360                                13-0871985
(State of Incorporation)        (Commission File Number)           (IRS employer Identification No.)

                 ARMONK, NEW YORK                                                 10504
     (Address of principal executive offices)                                   (Zip Code)

                         (Registrant's telephone number)

Item 5.  Other Events

    The registrant's press release dated December 31, 2002, regarding the sale
of its disk drive operations to Hitachi, Ltd. is Attachment I of this Form 8-K.

    IBM's web site (www.ibm .com) contains a significant amount of information
about IBM, including financial and other information for investors
(www.ibm.com/investor/). IBM encourages investors to visit its various web sites
from time to time, as information is updated and new information is posted.


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.

Date: December 31, 2002

                                              By: /s/  Robert F. Woods
                                                      (Robert F. Woods)
                                                Vice President and Controller

                                  Attachment I

SAN JOSE, CALIF. -- DECEMBER 31, 2002. IBM (NYSE: IBM) today announced it
has completed an agreement to combine its hard disk drive operations with
Hitachi's, forming a new company called Hitachi Global Storage Technologies.

Under the agreement, Hitachi has purchased the majority of IBM's HDD-related
assets for $2.05 billion. As planned Hitachi paid 70 percent of the purchase
price to IBM today. Hitachi will pay the remainder to IBM over the next
three years.

                                     # # # #