Lenovo Will Not Buy IBM Server Division

Consumer Electronics

Published: May 2, 2013 6:45 am

Chinese computer firm Lenovo will not buy the troubled server division of International Business Machines Corp. (NYSE: IBM). The unit is considered one of IBM’s worst performers. The U.S. firm would have been well rid of it. As usual with most corporate sales negotiations, the breaking point of the talks was price.

CNN Money reports on the Lenovo-IBM talks:

News of the negotiations surfaced last month in various publications and were confirmed by Fortune. Bloomberg put the value of the potential deal, which would cover IBM’s sale of its so-called x86 server business, at between $2.5 billion and $4.5 billion. Others suggested IBM was seeking as much as $6 billion. Lenovo is said to have balked at the price tag for the business, which generates close to $5 billion in sales, or about a third of IBM’s overall server revenue, according to estimates.

Shares of IBM are down fractionally in premarket trading to $199.60. The 52-week range is $199.20 to $202.17.

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