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Lenovo nearer deal to acquire IBM's low-end server business
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LENOVO Group Ltd is in talks to acquire International Business Machines Corp’s low-end server business, the world’s No. 1 personal computer maker’s latest expansion in the non-PC sector.
Lenovo expects to improve technology levels and profit margins after the deal, which is expected to be announced within weeks, Shanghai Daily learned today.
It’s also the last step for IBM, also known as Big Blue, in quitting the hardware business to focus on service and software sectors.
Both sides failed to agree last year on a price for the assets, estimated to be worth US$2.5 billion to US$4.5 billion.
Neither side would comment on the issue yesterday. But Lenovo said it would reveal “news of acquisition” within weeks.
In 2005, a purchase of IBM’s PC business for US$1.25 billion rocketed Lenovo, then the world’s No. 8 PC maker, to the third position. It finally became the world’s top PC maker by the end of last year, after buying control of Germany’s Medion AG and NEC Corp’s PC division in Japan.
Yang Yuanqing, Lenovo’s chief officer, said he was seeking all opportunities including acquisitions to expand beyond the core PC business. Lenovo has expanded into smartphones and the TV business to counteract the decline of global PC sales.
Among top-5 PC vendors, Lenovo and Dell Inc increased their sales while those of Hewlett-Packard, Acer Group and Asus declined in the fourth quarter, a seventh-straight quarter decline in global PC sales, according to US-based research firm Gartner Inc.
Worldwide PC sales totaled 82.6 million units in the fourth quarter, a 6.9 percent decline from a year earlier.
At the end of the fourth quarter, Lenovo took the lead with an 18.1 percent market share, followed by HP’s 16.4 percent, Dell’s 11.8 percent, Acer’s 7.8 percent and Asus’ 6.5 percent.
Besides Lenovo, Dell is also interested in the assets of IBM’s server business, media reported.
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