Beijing: China's Lenovo Group is buying IBM's server business for $2.3 billion, expanding a product line-up dominated by PCs, tablets and smartphones.
Lenovo, the world's biggest personal computer maker, said Thursday it expects to offer jobs to 7,500 IBM employees as part of its acquisition of the x86 server business.
The acquisition will accelerate Lenovo's moves to expand beyond its traditional PC business, said Peter Hortensius, a senior vice president.
"We see a transformation coming for our company from just being a PC company to being a mobile device, PC and enterprise server company," said Hortensius in a phone interview. "This provides another strong leg for that strategy."
Lenovo has its own server business but Hortensius said it is less than one-fifth the size of the IBM Corp. unit. He said the acquisition will move Lenovo ahead five years in its plan to expand in servers, raising its global ranking among suppliers from No. 6 to No. 3 and increasing its share of global server sales from 2 percent to 14 percent.
Lenovo passed rival Hewlett Packard Co. as the No. 1 PC maker in the third quarter of last year, a triumph that was tempered by eroding demand. The company has said it expects mobile devices to become the bulk of its business in coming years.
Lenovo, based in Beijing and in Research Triangle Park, North Carolina, has collaborated with IBM for a number of years. The Chinese company acquired IBM's PC unit in 2005 and has since expanded into wireless products including smartphones and tablets.
IBM, based in Armonk, New York, will continue to develop Windows and Linux software for the x86 platform and will provide service to customers for an extended period after the acquisition, Lenovo said.
