IBM Corp preferred to commit hara kiri rather than submit to the Indian government’s demand that all local subsidiaries of foreign companies should be majority owned by local investors, and closed down IBM India Pte Ltd in 1977, saying that direct control from Armonk was essential for effective running of all its foreign operations. Now the company has reluctantly concluded that Armonk doesn’t always know best, and 13 years on, its IBM Brasil Ltda has formed the first joint venture computer company permitted by the Brazilian government. It will own a 40% stake in MC&A Sistemas Pessoais SA, while SID Informatica Ltda will have 60% of the new company, which has as its target winning 25% of the Brazilian computer market in the next five years. In Brazil, 49% is the maximum holding permitted to foreign companies in joint ventures.
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