14 DAY TRIAL // IBM is one of the world's largest suppliers of server and data center products and systems, but even it has some business arms that haven't been paying off lately. Lenovo is more than eager to pounce on them. Or it, since only one is about to change hands.
Low-end servers are the business unit that IBM hasn't been getting much value out of recently, something that doesn't look like it will change any time soon.
Indeed, the value continues to dwindle actually, and IBM is seriously thinking of divesting itself of it.
And since it's not often that a business division just gets abandoned in the ditch, it makes sense that the corporation would be considering a sellout.
And with Lenovo interested in the business, it shouldn't take too long for the transaction to be put together and finalized.
Granted, Lenovo hasn't actually said that it would do it, or has rather said that it hasn't entered any definite agreement yet.
“The company has not entered into any definitive agreement in relation to the potential acquisition,” Lenovo’s Chief Executive Officer Yang Yuanqing said on Tuesday.
Still, reports (and Reuters) informed that Lenovo had already evaluated the acquisition, estimating a cost of around $2.5 billion / €1.85 billion.
The company is said to be in discussion with IBM and is expected to complete the transaction in a few weeks, tops. Meanwhile, Dell has also thrown in a bid, though we aren't sure what sum it's offering.
In any case, even though the low-end server unit of IBM seems to be a minor part of its operation, the value that Lenovo is attributing to it makes it clear that it's not really a small business at all. It's just a lot smaller than IBM as a whole.
It'll be interesting to see if Lenovo tries to introduce any ARM-based technology in the server division if it does buy it.