ARMONK, N.Y. — IBM Corp. plans to sell its IBM Retail Store Solutions (RSS) business to Toshiba TEC Corp. for $850 million.

The companies said Tuesday that upon closure of the deal, expected in late second quarter or early third quarter, Toshiba TEC would become the world’s leading retail point-of-sale systems company, offering hardware, software and integrated in-store solutions.

Also under the transaction, Toshiba TEC will enter into a multiyear pact with IBM in which Toshiba TEC will become an IBM partner for Smarter Commerce, an initiative launched in 2011 by IBM to help businesses automate and infuse intelligence into their procurement, marketing, sales and customer service functions to better serve online consumers in today’s mobile and social networks.

The companies said that part of the agreement will facilitate the availability of IBM’s enterprise-level Smarter Commerce solutions and services, which extend from the corporate data center to the local retail store, and Toshiba TEC’s customer-facing retail POS solutions to customers worldwide to meet the surging demand for multichannel commerce.

"Together, IBM and Toshiba TEC represent the broadest multichannel offerings worldwide," stated Craig Hayman, general manager of industry solutions for IBM Software Group. "The pace of retail expansion requires a strategy to serve this dynamic marketplace. This acquisition by Toshiba TEC creates not only the world’s leading point-of-sale company but also a key business partner for IBM in its strategically important Smarter Commerce initiative. Retailers can invest with confidence in the proven abilities of these two leaders to deliver multichannel commerce to more demanding consumers who want the same experience shopping online, in-store, mobile, social or by any other means."

Last year IBM’s RSS business, with approximately 1,000 employees worldwide plus maintenance specialists, had total revenue of about $1.15 billion.

With the finalization of the deal, Toshiba TEC is slated to acquire RSS’ overall business operation functions globally, including development, sales and related in-store maintenance. While the transaction is being completed, the companies will continue to operate independently. After the transaction closes, IBM will continue to provide maintenance services to RSS clients under a multiyear services agreement. RSS customer service and product availability will continue as usual as the RSS operations are integrated.

"The opportunities in retail store solutions are expected to grow by increasing demand in POS systems. In addition, demand for multichannel integration and enhancement of store back-office management accelerates further expansion of sales," commented Mamoru Suzuki, president and chief executive officer of Toshiba TEC, a subsidiary of Toshiba Corp. "Toshiba TEC will become the world’s foremost point-of-sale provider, capable of providing products and services at the same level of high quality. It also will allow Toshiba TEC to expand its global point-of-sales business through a combination of the competitive product lineup and worldwide network proven by Toshiba TEC’s and Retail Store Solutions’ history of the business."

Also with the closure of the agreement, a new holding company will be established in Japan. Toshiba TEC will acquire an 80.1% stake in the holding company and, to promote a smooth transfer, IBM will hold a 19.9% stake, with plans for the holding company to eventually become a wholly owned subsidiary of Toshiba TEC. The new companies, including the holding company, will continue to operate the RSS business worldwide as Toshiba TEC’s core retail POS solution affiliates.

Steven Ladwig, currently general manager of IBM Retail Store Solutions, will become the CEO of the new U.S. company with headquarters in Raleigh, N.C.