Earlier this week word surfaced that Lenovo and IBM were resuming talks that could see the former picking up the latter’s x86 server business. Lenovo has today confirmed that it intends to purchase that x86 server arm.
“This acquisition demonstrates our willingness to invest in businesses that can help fuel profitable growth and extend our PC Plus strategy,” said Yang Yuanqing, chairman and CEO, Lenovo. “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.”
Lenovo will acquire the IBM System x, BladeCenter, and Flex System blade servers and switches. The purchase also gets Lenovo the x86 Flex integrated systems, NeXtScale and iDataPlex servers and associate software, blade networking, and maintenance operations.
The purchase is worth about $2.3 billion according to Lenovo. Lenovo will pay about $2 billion of the purchase price in cash and the remainder in Lenovo stock. IBM will retain the System z, Power systems, Storage Systems, Power-based Flex servers, PureApplicaiton, and PureData service.
IBM, however, plans to continue development of its Windows and Linux x86 software portfolio. The two firms will also enter into a strategic relationship including global OEM and reseller agreement sales of the IBM entry and midrange Storwize disk storage systems and other systems. Lenovo also plans to offer employment to about 7500 IBM employees located around the world.
“This divestiture allows IBM to focus on system and software innovations that bring new kinds of value to strategic areas of our business, such as cognitive computing, Big Data and cloud,” said Steve Mills, Senior Vice President and Group Executive, IBM Software and Systems. “IBM has a proven record of innovation and transformation, which has enabled us to create solutions that are highly valued by our clients.”