Lenovo Set to Close $2.1B IBM Server Deal

Lenovo's acquisition of IBM's x86 server business is expected to close on Wednesday, for a price below the $2.3 billion announced early this year.

The purchase will be complete on Oct. 1 for $2.1 billion, based on a change to the valuation of inventory and deferred revenue liability, a Lenovo spokesman confirmed to PCMag.

As announced in January, the computer maker will take control of IBM's System X business, BladeCenter and Flex System blade servers and switches, x96-based Flex integrated systems, NeXtScale and iDataPlex servers and associated software, blade networking, and maintenance operations.

IBM, however, will retain its System z mainframes, Power Systems, Storage Systems, Power-based Flex servers, and PureApplication and PureData appliances.

"With the close of the x86 acquisition, Lenovo will add a world-class business that extends our capabilities in enterprise hardware and services, immediately making us a strong number three in the global server market," CEO Yang Yuanqing said in a statement.

The tech giants have a long-standing relationship, bolstered by Lenovo's 2005 acquisition of IBM's PC client business, which included the ThinkPad computer lineup. They will continue to work together, as IBM keeps a hand in the development of its Windows and Linux software portfolio for the x86 platform.

IBM, meanwhile, is making a renewed push to promote its own Power processor architecture by opening it to licensing and forming the OpenPower Consortium. IBM also recently announced the licensing of its ARM architecture for the development of customized networking equipment.

About 7,500 IBM employees around the globe are expected to join Lenovo.

"Lenovo has big plans for the enterprise market," said Gerry Smith, executive vice president of Lenovo Group. "Over time, we will compete vigorously across every sector, using our manufacturing scale and operational excellence to repeat the success we have had with PCs."

Lenovo is also awaiting the close of its deal to acquire Google's Motorola Mobility.

For more, check out PCMag's slideshow above featuring eight acquisitions that changed the face of computing—including Lenovo's purchase of IBM's PC business.