Lenovo to buy IBM x86 server business for $2.3 billion

Lenovo confirmed it has entered into a definitive agreement to acquire IBM's x86 server business for $2.3 billion.

It 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. The purchase price includes around $2 billion in cash and the remainder in Lenovo stock. IBM will retain its System z mainframes, Power Systems, Storage Systems, Power-based Flex servers, and PureApplication and PureData appliances. 

Lenovo already acquired IBM's PC business in 2005, helping it become the world's largest PC maker last year. With the PC market slowing, the acquisition of the server business will provide a new growth area for Lenovo. IBM plans to focus more on software and services and will continue to develop Windows and Linux software portfolio for the x86 platform. 

In addition, an OEM and reseller agreement will see Lenovo offer IBM's entry and midrange Storwize disk storage systems, tape storage systems, General Parallel File System software, SmartCloud Entry offering, and certain system software, including Systems Director and Platform Computing products. 

Following the closing of the transaction, IBM will continue to provide maintenance on Lenovo’s behalf for an extended period of time. Approximately 7,500 IBM employees around the world will be offered employment by Lenovo as part of the deal. The takeover remains subject to regulatory approval and other closing conditions.