Lenovo plans to acquire IBM’s x86 server business for $2.3 billion

NEW DELHI: Lenovo and IBM have entered into a definitive agreement in which Lenovo plans to acquire IBM’s x86 server business.

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

The purchase price is approximately $2.3 billion, approximately two billion of which will be paid in cash and the balance in Lenovo stock, the company said in a statement.

Back in 2005, lenovo had acquired IBM’s PC business, which included the ThinkPad line of PCs.

Post the transaction, Lenovo will take over customer service and maintenance operations. IBM will continue to provide maintenance delivery on Lenovo’s behalf for an extended period of time, so customers should see little change in their maintenance support.

Approximately 7,500 IBM employees around the world, including those based at locations such as Raleigh, Shanghai, Shenzhen and Taipei, are expected to be offered employment by Lenovo.

This agreement follows recent announcements by IBM that it will invest more than $1 billion in the new IBM Watson Group, and $1.2 billion to expand its global cloud computing footprint to 40 data centers worldwide in 15 countries across five continents.