An agreement between Lenovo and IBM is in its final stages. In accordance with this pact, Lenovo is to acquire IBM’s x86 server business for a whopping $2.3 billion. However, that would be money well spent. The paraphernalia of equipment, comprising both hardware and software, will be shifted to the Lenovo premises. And about 7500 workers at IBM’s small-time enterprise will find new jobs at Lenovo.
Of the $2.3 billion, about two billion will be transferred in cash. Meanwhile, the rest will consist of the sales of Lenovo’s stocks. IBM will get to keep much of its original stuff. But an exchange of technology and psychology will occur nevertheless.
“This acquisition demonstrates our willingness to invest in businesses that can help fuel profitable growth and extend our PC Plus strategy,” said Yang Yuanqing, chairman and CEO, Lenovo. “With the right strategy, great execution, continued innovation and a clear commitment to the x86 industry, we are confident that we can grow this business successfully for the long-term, just as we have done with our worldwide PC business.”
The Windows and Linux sections of IBM will undergo maintenance by the mother company. The bond between IBM and Lenovo will hopefully lead to future cooperation and consolidation that will be a boon for humanity. Of the thousands of employees of IBM, many who will change organizations are located in China.
The two high tech firms have agreed that they will maintain their basic freedom as separate entities though. Nothing can get in the way of that. In the capacity of a PC manufacturer, Lenovo has nothing to lose and everything to gain via this lucrative transaction. And so does IBM.
“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,” said Steve Mills, Senior Vice President and Group Executive, IBM Software and Systems. “IBM has a proven record of innovation and transformation, which has enabled us to create solutions that are highly valued by our clients.”