Lenovo tipped to buy IBM X86 business

Posted by a staff writer

Just as Lenovo started climbing the ladder to become a top PC seller when it picked up IBM's PC business, it is now rumoured to be in early discussion about buying Big Blue's x86 server business.

Both the Wall Street Journal and Bloomberg have reported rumours that the Chinese PC seller  is interested in IBM's server unit, which isn't making as much cash in revenues as the latter would like. With IBM's results taking a bit of a kicking, a deal between the two could be just weeks away, and worth up to an estimated $4.5 billion.

Lenovo conceded that it is in the early stages of discussions with a third party about a potential acquisition. Meanwhile, an unnamed executive deep throat told CRN that Lenovo is the only company in the running to buy IBM's x86 business.

The move could be seen as the first major play by recently appointed CEO Virginia Rometty - looking to shed excess weight from the company's portfolio and focusing on other higher revenue areas.

Lenovo, for its part, would be undertaking a serious diversifying of its portfolio by picking up the server unit - pushing into the enterprise beyond its traditional role as a PC shifter. While it has managed to weather the storm of the global recession and keep PC sales relatively reasonable, the company may be looking to build on other, more consistent revenue streams - a hefty buy from IBM would not look amiss next to the company's server and network storage work that began with an EMC collaboration in mid 2012.

See more about: