Lenovo and IBM have entered into a definitive agreement in which Lenovo plans to
acquire IBM’s x86 server business.
This includes System x, BladeCenter and Flex System blade servers and
switches, x86-based Flex integrated systems, NeXtScale and iDataPlex
servers and associated software, networking and maintenance operations.
The purchase price is approximately US$2.3 billion,
approximately two billion of which will be paid in cash and the balance
in Lenovo stock.
IBM will retain its System z mainframes, Power
Systems, Storage Systems, Power-based Flex servers, and PureApplication
and PureData appliances.
The agreement builds
upon a longstanding collaboration that began in 2005 when Lenovo
acquired IBM’s PC business, which included the ThinkPad line of PCs. In
the period since, the companies have continued to
collaborate in many areas.
IBM will continue to
develop and evolve its Windows and Linux software portfolio for the x86
platform. IBM is a leading developer of software products for x86
servers with thousands of products and tens of thousands
of software developer and services professionals who build software for
x86 systems.
Lenovo and IBM plan to enter into a strategic
relationship which will include a global OEM and reseller agreement for
sales of IBM’s industry-leading entry and midrange Storwize disk storage
systems, tape storage systems, General Parallel
File System software, SmartCloud Entry offering, and elements of IBM’s
system software portfolio, including Systems Director and Platform
Computing solutions.
Following the closing of the transaction, Lenovo
will assume related customer service and maintenance operations. IBM
will continue to provide maintenance delivery on Lenovo’s behalf for an
extended period of time, so customers should see
little change in their maintenance support.
Approximately 7,500 IBM employees around the world,
including those based at major locations such as Raleigh, Shanghai,
Shenzhen and Taipei, are expected to be offered employment by Lenovo.
This agreement follows
recent announcements by IBM that it will invest more than $1 billion in
the new IBM Watson Group, and $1.2 billion to expand its global cloud
computing footprint to 40 data centers worldwide
in 15 countries across five continents.
“This acquisition demonstrates our willingness to
invest in businesses that can help fuel profitable growth and extend our
PC Plus strategy,” said Yang Yuanqing, chairman and CEO, Lenovo. “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.”
“This divestiture allows IBM to focus on system and
software innovations that bring new kinds of value to strategic areas
of our business, such as cognitive computing, Big Data and cloud,” said
Steve Mills, Senior Vice President and Group
Executive, IBM Software and Systems. “IBM has a proven record of
innovation and transformation, which has enabled us to create solutions
that are highly valued by our clients.”
The transaction is subject to the satisfaction of
regulatory requirements, customary closing conditions and any other
needed approvals. Subsequent local closings will occur subject to
similar conditions, agreements and the information
and consultation process in applicable countries.
While the transaction is being completed, both
companies expect no change in their independent, existing server
operations, including customer service and product availability.
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