Lenovo to purchase IBM x86 server business for US$2.3 billion

Lenovo plans to purchase IBM’s x86 server business for a cash and stock package worth around US$2.3 billion dollars under a new definitive agreement between the two companies.

The purchase price comprises about US$2 billion in cash, with the remainder made up of Lenovo stock.

About 7500 IBM employees “are expected” to be offered employment by Lenovo, a statement from IBM said.

Under the deal, Lenovo will acquire elements of IBM’s business, including System x, BladeCenter, Flex System, NeXtScale, iDataPlex and others.

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

Lenovo will assume related customer service and maintenance operations once the acquisition is completed. 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”, a statement from IBM said.

The transaction is subject to the satisfaction of regulatory requirements and customary closing conditions.

IBM and Lenovo are not strangers to one another: in 2005 Lenovo purchased IBM’s PC business.