Thursday, January 23, 2014

Lenovo purchase IBM servers largest acquisition deal in China's IT

BEIJING, Jan 23 (Reuters) - Lenovo Group, the largest PC maker in the world, has agreed to buy a unit of IBM servers in a deal expected long ago and valued at $ 2.3 billion, the largest acquisition ever taken by a Chinese technology company.

Lenovo will pay 2.07 billion dollars in cash and the remainder in shares of computer maker based in Beijing, the company said in a statement to the Hong Kong stock exchange on Thursday.

The agreement goes beyond the acquisition by Baidu's 91 Wireless, formerly owned by NetDragon Websoft, for 1.84 billion dollars last year, according to Thomson Reuters data, and highlights the growth of the country's tech companies as they evaluate international expansion.

The acquisition will enable Lenovo to diversify its revenues beyond the distressed segment of PCs and to refashion itself as a growing force in mobile devices and data storage servers.

The sale enables IBM to get rid of your x86 low margin business, which sells less powerful and slower than the offerings of higher margin company servers, and focus on the shift to more profitable software and services.

The acquisition by the Lenovo ThinkPad PC business of IBM in 2005 for $ 1.75 billion became the springboard for the company to reach the top of the world ranking of manufacturers of PCs

The market is betting that Lenovo will have a similar success with his new acquisition, which is partly reflected in the valuation of 9.44 percent in its stock this year.

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