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Lenovo Agrees to Buy IBM Server Business for $2.3 Billion


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Lenovo said on Thursday that it would pay $2.3 billion for IBM’s low-end server business, successfully concluding a deal that had fizzled a year earlier after the two parties failed to agree on a price.

Lenovo said it would settle the transaction with $2 billion in cash and the balance in its own Hong Kong-listed shares. About 7,500 IBM employees in locations including Raleigh, N.C., Shanghai and Shenzhen in China, and Taipei, Taiwan, were expected to be offered employment by Lenovo, the Chinese company said in a statement.


“With the right strategy, great execution, continued innovation and a clear commitment to the x86 industry, we are confident that we can grow this business successfully for the long-term, just as we have done with our worldwide PC business,” Yang Yuanqing, Lenovo’s chairman and chief executive, said in a statement, referring to the server industry.


Early last year, Lenovo and IBM were in negotiations about the unit, which includes IBM’s x86 server business. At the time, Lenovo valued the unit at about $2.5 billion, while IBM wanted at least $4 billion.

IBM restarted talks with interested parties recently.

Dell and Fujitsu were among the other bidders.

But because Lenovo had already taken a close look at the business last year, it was able to quickly make an offer that IBM was comfortable with.

Lenovo bought IBM’s ThinkPad personal computer business in 2005 for $1.75 billion.


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after laptop now server business sold to lenovo again :lol:

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