Lenovo has completed the initial closing of its acquisition of IBM’s x86 server business

Lenovo has completed the initial closing of its acquisition of IBM’s x86 server business, company officials announced at the beginning of October. The $2.1 billion agreement, which was initially announced in January, won government approval in August.

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

This isn’t the first time IBM and Lenovo have been linked in a major transaction. In 2004 Lenovo acquired IBM’s Personal Computing Division. Lenovo CEO Yang Yuanqing has said he expects the x86 server unit to generate $5 billion of revenue during its first year and higher margins than the 4% margin of Lenovo’s PC business.

“With the close of the x86 acquisition, Lenovo will add a world-class business that extends our capabilities in enterprise hardware and services, immediately making us a strong number three in the global server market,” said Yang Yuanqing, chairman and CEO of Lenovo. “Now, our priorities are to ensure a smooth integration and deliver a seamless transition for customers. By combining Lenovo’s global reach, efficiency and operational excellence with IBM’s legendary quality, innovation and service, I am confident that we will have competitive advantages to help us drive profitable growth and build Lenovo into a global enterprise leader.”

Analysts said the acquisition could help Lenovo diversify beyond personal computers and take market share from HP in the server business. Lenovo was founded in China in 1984 and has ascended into a $39 billion company and the No. 1 PC maker in the world. IBM, meanwhile is getting out of the x86 business, which has become commoditized, and continues to focus on mainframes and other growth areas like big data and analytics.

Lenovo (HKSE: 992) (ADR: LNVGY) and IBM (NYSE: IBM) today announced that they have completed the initial closing for Lenovo’s acquisition of IBM’s x86 server business under the terms described in their announcement on Monday, September 29, 2014.

Source: vetement chinois