Lenovo: $2.1 bn deal for IBM x86 server business to begin closing

Lenovo on Monday said it will begin closing the $2.1 billion deal for buying IBM’s x86 server business effective on October 1, 2014.

The acquisition will make Lenovo the third-largest player in the $42.1 billion global x86 server market.

As part of the deal – announced in January — 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.

Yang Yuanqing, chairman and CEO of Lenovo, said: “Now, our priorities are to ensure a smooth integration and deliver a seamless transition for customers.”


Gerry Smith, executive vice president of Lenovo Group and president of Enterprise Business Group and Americas Group, said: “Lenovo has big plans for the enterprise market. Over time, we will compete vigorously across every sector, using our manufacturing scale and operational excellence to repeat the success we have had with PCs.”

In January, Lenovo and IBM announced that they have also forged an alliance where Lenovo will serve as an Original Equipment Manufacturer (OEM) to IBM and resell selected products from IBM’s storage and software portfolio.

Lenovo is committed to following the IBM x86 product roadmap, including Flex and x86-based PureFlex integrated systems. Lenovo will continue to drive innovation in these products.

The IBM x86 server business team 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.

Lenovo in a statement said the deal satisfied regulatory requirements and conditions, including clearance by the Committee on Foreign Investment in the United States (CFIUS), the European Commission and the Chinese Ministry of Commerce.

The transition will begin Wednesday in countries that are part of the initial closing, which includes most major markets. The transaction is expected to close in most other countries later this year, with the few remaining countries following in early 2015.

Baburajan K
[email protected]