IBM may sell x86 server business to Lenovo, reports say

The deal would reshape the x86 server market

IBM is in "advanced discussions" with Lenovo over a possible deal for it to purchase IBM's x86 server business, according to two news reports.

Any such deal would reshape the massive x86 server market, which was worth US$35.8 billion last year and accounted for two-thirds of all server spending, according to figures from IDC.

The sale price isn't known, but the deal could be worth billions of dollars if it goes ahead, said The Wall Street Journal, which cited unnamed people familiar with the matter.

CRN reported the news earlier in the day, also citing unnamed sources. It said IBM wants $5 billion or $6 billion for the business.

It wasn't clear how advanced the talks are or whether a deal will come about, the Journal said.

An analyst asked IBM about the talks during the company's quarterly earnings call Thursday and CFO Mark Loughridge replied that he would not comment on "rumors."

IBM has a history of moving out of lower-margin businesses, the Journal noted. It already sold its PC business to Lenovo, in 2004.

Lenovo, meanwhile, has been trying to expand its share of the server market.

(Joab Jackson in New York contributed to this report.)

James Niccolai covers data centers and general technology news for IDG News Service. Follow James on Twitter at @jniccolai. James's e-mail address is james_niccolai@idg.com

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Tags business issuesserversIBMhardware systemsLenovoLow-end serversMergers and acquisitions

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James Niccolai

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