IBM sells server business to Lenovo to focus on data and the cloud

IBM reaffirms its commitment to cognitive computing, big data and the cloud under a new deal with Chinese personal computer manufacturer Lenovo.

Lenovo has agreed to acquire IBM’s x86 server business for US$2.3 billion, the two companies announced late Thursday.

The deal, pending regulatory review, marks the largest international tech acquisition from a Chinese company.

Approximately US$2 billion of the purchase price will be paid in cash and the balance in Lenovo stock.

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.

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.

“IBM has a proven record of innovation and transformation, which has enabled us to create solutions that are highly valued by our clients,” said Steve Mills, senior vice president and group executive, IBM Software and Systems.

“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.”