Lenovo acquires IBM's x86 server unit for $2.1b

Now a major player in servers, PCs and smartphones

Lenovo has boosted its business biceps through the acquisition of IBM's x66 server unit for $2.1 billion, transforming it into the third-largest player in the global server market.

The deal, which was announced in January and will be completed on October 1, was at one point under threat of not happening due to concerns raised by the US government around the security of Lenovo's products.

Lenovo currently sells low-end ThinkServer models, the latest being its TD350 and RD650 that were announced at Intel's IDF 2014 conference earlier this year.

The aquisition will see it get its hands on IBM's System x, BladeCenter and Flex System blade servers and switches, 86-based Flex integrated systems, NeXtScale and iDataPlex servers and associated software, blade networking and maintenance operations. Big Blue will keep hold of its System z mainframes, Power Systems, Storage Systems, Power-based Flex servers, Pure Application and PureData appliances.

Growth plan

In a statement, the company's CEO and chairman Yang Yuanqing said that the acquisition would give Lenovo's enterprise hardware and services leg-up and a competitive advantage to help drive profitable growth.

IBM's x86 server business will be organised under Lenovo's Enterprise Business Group, and will continue to be led by IBM's senior vice president of Enterprise Systems, Adalio Sanchez, who headed the unit prior to the acquisition, Lenovo said.

It is not the first time the two companies have done big business. Lenovo acquired IBM's consumer PC laptop business in 2005, which saw the company go on to replace HP as the world's top personal PC maker last year.