Lenovo to close its acquisition deal on IBM’s server division on Oct. 1
Share on Twitter.
Get the most reliable SMTP service for your business. You wished you got it sooner!
September 29, 2014
Lenovo said earlier today that it will close its acquisition deal on IBM’s x86 server
division on October 1st after a few hundred million dollars was dropped from the initial
The Chinese technology company will complete the transaction with a closing purchase price
of $2.1 billion, which is a little lower than the original $2.3 billion price tag because of
a change in the valuation of IBM’s server inventory and deferred revenue liability, Lenovo said.
Lenovo will hand over around $1.8 billion in cash and the rest in stock for a slice of an
old faithful in the technology world that it will be hoping can open some doors to international
“With the closing of this x86 server acquisition, Lenovo will add a world-class business
that extends our capabilities in enterprise hardware and services, immediately making us a
strong number three contender in the global server market,” said Yang Yuanqing, chairman and CEO
“Today, our priorities are to ensure a smooth integration and deliver a seamless transition
for enterprise customers. By combining Lenovo’s global reach, efficiency and operational excellence
with IBM’s legendary quality, innovation and service, I am confident that we will have competitive
advantages to help us drive profitable growth and build Lenovo into a global enterprise leader.”
Lenovo is pretty good when it comes to spending its way into markets. The company already
acquired IBM’s PC business back in 2005 and is in the midst of acquiring Motorola Mobility’s
smartphone business from Google, a decision that will make it the world’s third largest smartphone
maker as well.
There was some concern at one point that Lenovo’s offer for IBM servers wouldn’t pass muster,
given the current U.S. attitude towards Chinese technology firms.
The United States and China have been at loggerheads over multiple cybersecurity issues,
accusing each other of corporate espionage and general spying and their suspicions have led
to deals between companies from the two countries getting delayed or even scrapped altogether.
The U.S. Treasury Department’s Committee on Foreign Investment in the United States, which
looks at the national security implications of specific business deals, was looking into the Lenovo
acquisition and several reports suggested that it was worried about giving China a boost in
high-performance computing and it was concerned that Lenovo could give China access to IBM servers.
But the committee okayed the deal in August. As part of the x386 server division deal, Lenovo will
also partner up with IBM on storage and software as well, becoming a reseller of IBM products
including Storwize, LTO, Smart Cloud and Platform Computing.
Get the most dependable SMTP server for your company. You will congratulate yourself!
Share on Twitter.