So IBM will not sell off its x86 server business after all-- Fortune reports Lenovo-IBM negotiations have "broken down," at least according to anonymous sources familiar with the situation.
News on the supposed deal emerged earlier last month from The Wall Street Journal and CRN.
According to Fortune discussions screeched to a halt over "valuation concerns," meaning the two companies could not decide over the actual value of the x86 segment in question. Bloomberg values it at $2.5-4.5 billion, while others suggest IBM demands up to $6bn-- a price tag Lenovo "balked at."
Lenovo admitted it was in "preliminary negotiations with a third party in connection with a potential acquisition" last week in a Hong Kong stock exchange filing. It refuses to comment directly on the news stories, as does IBM.
The acquisition rumours make sense, mind-- after all, in 2004 IBM sold off its PC hardware business to Lenovo for $1.75bn, a deal vaulting Lenovo from mid-size Asian PC maker to Top 5 PC vendor while allowing IBM to concentrate on the shift into software and solutions developer. And one does tend to do business with those they know best...
Go Lenovo-IBM Talks over Server Business Break Down (Fortune)
