Cloud Computing, Internet Datacenters and Big Data Business Intelligence from China

Lenovo Buys IBM’s Server Business In Cash And Stock Deal

Nine years after Lenovo purchased IBM's PC business, the Chinese company has now sealed a deal to buy IBM's server business for approximately USD2.3 billion.

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, blade networking and maintenance operations. Approximately USD2 billion will be paid in cash and the balance in Lenovo stock.

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

The agreement builds upon a longstanding collaboration that began in 2005 when Lenovo acquired IBM's PC business, which included the ThinkPad line of PCs.

IBM will continue to develop and evolve its Windows and Linux software portfolio for the x86 platform.

Lenovo and IBM plan to enter into a strategic relationship which will include a global OEM and reseller agreement for sales of IBM's Storwize disk storage systems, tape storage systems, General Parallel File System software, SmartCloud Entry offering, and elements of IBM's system software portfolio, including Systems Director and Platform Computing solutions.

Following the closing of the transaction, Lenovo will assume related 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 major locations such as Raleigh, Shanghai, Shenzhen and Taipei, are expected to be offered employment by Lenovo.

The transaction is subject to the satisfaction of regulatory requirements, customary closing conditions and any other needed approvals.

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