October 2, 2014

Lenovo to close $2.1 billion deal, acquire IBM server business

Tech Times reported this morning that Lenovo and IBM are closing in on a $2.1 billion deal (approximately $1.8 billion in cash and $280 million in stock) in which Lenovo would acquire IBM's x86-based server business. It is estimated that the deal will close tomorrow, Oct. 1. According to Tech Times reporter Dianne Depra, the acquisition would give Lenovo "the third biggest slice of the market for x86 servers, which is estimated to be worth $42.1 billion globally."

In a press release put out by Lenovo yesterday, the company's CEO, Yang Yuanqing, stated that the acquisition of IBM's server business would expand Lenovo's enterprise hardware and services offerings. Additionally, Yuanqing stated that "the agreement builds upon a strong history of collaboration that began in 2005 when Lenovo acquired IBM's PC business, including the ThinkPad line of PCs."

Lenovo Group's executive vice president, Gerry Smith, stated that the acquisition is representative of IBM's strength and reliability as a technology provider and referenced Lenovo's "big plans for the enterprise market," adding that Lenovo intends to be a fierce competitor "across every sector," using its strengths in manufacturing and operations to increase success.

According to Depra's Tech Times report, this acquisition will give Lenovo the resources they need to provide all-encompassing information technology solutions targeted at enterprises. This is not Lenovo's only pending acquisition, reports Depra. "Lenovo is also set to acquire Motorola Mobility from Google, poising it to also become the third largest smartphone manufacturer in the world."

Closing a successful and lucrative technology merger deal is a complex process. If you are looking to buy or sell a tech company, contact an M&A advisor to develop a successful strategy and attain the results you're looking for.