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.
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| 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).
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Lenovo acquires IBM’s server business