Thursday, January 23, 2014

Lenovo acquires IBM’s server business

Lenovo has announced on Thursday that it is set to acquire IBM’s x86 server business which System x, BladeCenter and Flex System products for $2.3bn. $2bn will be paid in cash by the Chinese company while the rest will be paid with Lenovo’s stock.

There are reports that Lenovo has been in negotiations with IBM since last year to make this deal but was only ready to pay about $2.5bn while IBM wanted about $4.5bn.
IBM servers
IBM servers. Pic: Arstechnica
This acquisition demonstrates our willingness to invest in businesses that can help fuel profitable growth and extend our PC Plus strategy,” Yang Yuanqing, Lenovo’s CEO and Chairman said in a statement.
This is the biggest acquisition in China’s history surpassing Baidu Inc.’s acquisition of 91 Wireless from NetDragon Websoft Inc. for $1.85bn.
It is now expected that International Business Machine (IBM) will focus more on its Watson supercomputer and global cloud computing business.
This divestiture allows IBM to focus on system and software innovations that bring new kinds of value to strategic areas of our business, such as cognitive computing, big data and cloud,” Steve Mills, senior vice president and group executive of IBM Software and Systems division said.
This will not be the first time Lenovo will be doing business with IBM after the acquisition of IBM’s PC business in 2005 for $1.75bn. Lenovo has grown since then to become the largest PC maker in the world.

The deal is still subject to clearance from the Committee on Foreign Investment in the United States (CFIUS).

0 comments:

Post a Comment

What's your view on this? We'll be happy to listen to your opinion.

Related Posts Plugin for WordPress, Blogger...