Lenovo in talks to buy IBM’s x86 business

Chinese computer maker Lenovo Group is in talks with IBM Corp for acquiring its x86 server hardware business, technology news site CRN yesterday reported, citing sources with knowledge of the situation.

Lenovo, the world's second-biggest personal computer maker, today said that it was in preliminary talks over a potential acquisition, but did not name the acquisition target.

"As at the date of this announcement, no material terms concerning the potential acquisition have been agreed," Beijing-based Lenovo said in a statement to the Hong Kong Stock Exchange.

The move comes eight years after Lenovo acquired IBM's PC unit for $1.25 billion.

CRN has said that IBM is seeking $5 billion to $6 billion for its x86 server hardware business, which makes servers that are used to power large corporate data centers.

IBM is keen on selling this business to Lenovo since it does not view the Chinese company as a threat to other parts of its business, since Lenovo does not have storage, networking or converged infrastructure in-house, nor does it have much of a footprint in the data centre.

IBM's server business has been underperforming, but still managed to generate $9.7 billion in the fourth quarter last year, according to figures from market intelligence firm IDC.