Lenovo buys part of IBM server business for $2.3bn

Published
0

BEIJING: China's Lenovo Group is buying part of IBM's server business for $2.3 billion, adding to a product line-up dominated by personal computers and smartphones.

Lenovo said Thursday it expects to offer jobs to 7,500 IBM employees in locations around the world as part of its acquisition of IBM's x86 server business.

The purchase allows Lenovo to expand its range of products and reduce reliance on sales of PCs, a market that is weakening as customers shift rapidly to smartphones and other wireless devices.

Lenovo and IBM have collaborated for a number of years. The Chinese company entered the global personal computer market in 2005 by acquiring IBM's PC unit. It has since expanded into wireless products including smartphones and tablets.

"We are confident that we can grow this business successfully for the long-term, just as we have done with our worldwide PC business," said Yang Yuanqing, Lenovo's chairman and CEO, in a statement.

Lenovo was declared the No. 1 personal computer maker in the third quarter of last year by research firms Gartner and IDC, surpassing rival Hewlett Packard Co. That was tempered, however, by the steady erosion of worldwide PC demand.

Lenovo, which is based in Beijing and in Research Triangle Park, North Carolina, has said it expects mobile devices to become the bulk of its business in coming years.

IBM, based in Armonk, New York, will continue to develop Windows and Linux software for the x86 platform and will provide service to customers for an extended period after the acquisition, Lenovo said.

The two companies also plan to enter into a strategic relationship. It will include a reseller agreement for IBM's Storwize disk storage systems, tape storage systems, and certain cloud, file system, platform computing and system software products.

The acquisition announced Thursday covers IBM's 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, Lenovo said.

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

In its latest financial report, Lenovo said profit rose 36 percent from a year earlier to $220 million in the three months ending Sept. 30. Sales rose 13 percent to $9.8 billion.

Opinion

Editorial

Fixing bond markets
Updated 01 Oct, 2026

Fixing bond markets

Pension funds, insurance companies, mutual funds, retail investors, and eventually, foreign investors must become bigger participants in the market.
Call centre rackets
01 Oct, 2026

Call centre rackets

A NUMBER of recent raids conducted by the authorities in different cities point to the growing threat fraudulent ...
Homeward bound
01 Oct, 2026

Homeward bound

FIVE months after Somali pirates captured an oil tanker carrying a 19-member multinational crew, Somali maritime...
Kashmir unresolved
Updated 30 Sep, 2026

Kashmir unresolved

The just solution lies in India addressing the issue through a trilateral dialogue involving the legitimate representatives of the Kashmiri people and Pakistan.
Water shortage
30 Sep, 2026

Water shortage

THAT the country is entering the Rabi season with an anticipated water shortage of nearly 25pc, the lowest carryover...
Young hearts
30 Sep, 2026

Young hearts

THE observance may have passed, but the message of World Heart Day should not fade with it. The occasion is a useful...