Rumor Has Lenovo Buying IBM’s Server Business

Posted by at 10:33 am on April 22, 2013

Chinese PC manufacturer Lenovo may be heading back to IBM for yet another purchase, as Bloomberg reports that the company is in talks with IBM to buy its server business. The deal, still very much in the formative stages, could see Lenovo paying between $2.5 and $4.5 billion for IBM’s server division, depending on what is included. A source close to the negotiations says an agreement on the deal could be weeks away.

The deal would mark the second time that Lenovo has bought an IBM division in order to add to its own capabilities. In 2005, the Chinese firm bought IBM’s PC unit. Since then, Lenovo has gone on to become the world’s second-largest PC manufacturer, and it was the only manufacturer to continue unit shipment growth over the last quarter as the rest of the PC industry foundered.

Bringing IBM’s low-cost x86 servers into Lenovo’s operations, some say, would be a good fit. Lenovo reportedly has a lower cost of doing business than does IBM, so it may be able to make better money off the division.

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