News

Lenovo to Close US$ 2.1 billion IBM’s x86 Server Deal

Acquisition to strengthen Lenovo’s position as global, diversified tech leader, accelerates growth of enterprise and cloud strategies

Lenovo and IBM announced that conditions for Lenovo’s acquisition of IBM’s x86 server business have been satisfied and the parties anticipate they will begin closing the transaction effective on October 1, 2014. The acquisition will make Lenovo the third-largest player in the $42.1 billion global x86 server market announced the press release.

Lenovo is acquiring 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. IBM will retain its System z mainframes, Power Systems, Storage Systems, Power-based Flex servers, PureApplication and PureData appliances.

“With the close of the x86 acquisition, Lenovo will add a world-class business that extends our capabilities in enterprise hardware and services, immediately making us a strong number three in the global server market,” said Yang Yuanqing, Chairman and CEO, Lenovo. “Now, our priorities are to ensure a smooth integration and deliver a seamless transition for customers.”

Commenting on this, Amar Babu, MD, Lenovo India, said, “Since we acquired IBM’s PC business, our India growth has evolved significantly and we hope to repeat the same success with the x86 acquisition. The addition of x86 servers will play a key role in driving innovation in our PC business and in turn, Lenovo’s scale, efficiency and channel reach capabilities will further strengthen the x86 server business.“

The global team of the IBM x86 server business will be organized under Lenovo’s Enterprise Business Group. Adalio Sanchez led the x86 server business at IBM and will continue in this capacity at Lenovo, as senior vice president of Enterprise Systems, reporting to Gerry Smith, Executive Vice President of Lenovo Group and President of Enterprise Business Group and Americas Group.

The purchase price is approximately US$ 2.1 billion. Approximately US$ 1.8 billion will be paid in cash at closing after estimated adjustments and approximately US$ 280 million will be paid in Lenovo stock, based on the closing price of Lenovo’s stock on September 26, 2014.

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