Lenovo to acquire IBM’s Low-end Server Business for $2.3 Billion


Lenovo has just announced its plans to acquire IBM’s x86 server business. This deal is worth of $2.3 billion. Lenovo will pay around $2 billion in cash and the balance amount in Lenovo Stock.

The deal includes System x, BladeCenter and Flex System blade servers and switches, x86-based Flex integrated systems, NeXtScale and iDataPlex servers and associated software, blade networking and maintenance operations.

After this deal, IBM will continue to develop and evolve its Windows and linux software for x86 platform.

Approximately 7,500 IBM employees around the world are expected to join Lenovo after this deal.

This deal is surprising when IBM’s system x division has posted 15% year-on-year sales drop. Increase in sales of Tablet and smartphone are the main reason. But Lenovo want to build a stronger portfolio to compete with HP and other rivals. Back in June 2013, Lenovo became world’s number one PC maker. Since then, Lenovo is trying to capture the PC and sever market.

Lenovo had acquired IBM’s PC business (that included ThinkPad line of PCs) back in 2005 for $1.5 Billion.