January 27, 2014

Lenovo acquires IBM’s x86 server business for $2.3 billion

On Thursday, January 23, Lenovo published a press release announcing plans to purchase IBM's x86 server business for $2.3 billion. 

According to USA Today, Lenovo is the biggest personal computer (PC) manufacturer in the world, having surpassed Hewlett Packard in mid-2013. That being said, this agreement will give Lenovo the resources it needs to position itself as a leading mobile device and enterprise server company as well. While Lenovo already has its own server business, the news outlet notes that it's a fraction of the size of IBM's. 

"This acquisition demonstrates our willingness to invest in businesses that can help fuel profitable growth and extend our PC Plus strategy," Yang Yuanqing, chairman and CEO of Lenovo, said in a press statement. "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."

IBM executive Steve Mills added that this acquisition will enable IBM to focus its attention on system and software innovations going forward.  

As part of the agreement, Lenovo is expected to offer job opportunities to 7,500 IBM employees worldwide.

In many cases, business acquisitions provide opportunities for companies to evolve without having to completely redefine internal structures. By bringing in fully developed teams, businesses can ensure smooth transitions that benefit everyone involved. 

Of course, going through the process of purchasing a company can be challenging, which is why there are corporate mergers and acquisitions firms that can assist from beginning to end.