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Lenovo breaks out checkbook, purchases x86 IBM server unit for $2.3B

Lenovo will purchase the IBM x86 server business unit, as the Chinese maker seriously pushes into the server market (HKG:0992, NYSE:IBM)

| Computer Systems News | Posted: Jan 23, 2014 7:18 pm

Chinese PC manufacturer Lenovo will purchase IBM's lower-end x86 server unit for $2.3 billion after months of continued negotiations on both sides. The deal, once approved by U.S. government regulators, will give IBM the ability to focus on software and IT services.

 

TweakTown image news/3/5/35036_01_lenovo_breaks_out_checkbook_purchases_x86_ibm_server_unit_for_2_3b.jpg

 

IBM will continue to manufacture higher-end servers, and remains the No. 2 server manufacturer, trailing only behind Hewlett-Packard.

 

"This acquisition demonstrates our willingness to invest in businesses that can help fuel profitable growth and extend our PC Plus strategy," said Yang Yuanging, Lenovo CEO, in a statement. "With the right strategy, great execution, continued innovation and a clear commitment to the x86 industry, we are confident that we can grow this business successfully for the long-term, just as we have done with our worldwide PC business.

 

Lenovo, the No. 1 global PC manufacturer, has struggled to compete against HP, Dell, and other manufacturers in the server market. The Chinese manufacturer wants to shift focus to the server market, where profit margins are higher than the regular PC and notebook business.

NEWS SOURCES:News.lenovo.com

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