Most Popular
-
1
Dongduk Women’s University halts coeducation talks
-
2
Defense ministry denies special treatment for BTS’ V amid phone use allegations
-
3
Russia sent 'anti-air' missiles to Pyongyang, Yoon's aide says
-
4
OpenAI in talks with Samsung to power AI features, report says
-
5
Two jailed for forcing disabled teens into prostitution
-
6
Trump picks ex-N. Korea policy official as his principal deputy national security adviser
-
7
South Korean military plans to launch new division for future warfare
-
8
Gold bars and cash bundles; authorities confiscate millions from tax dodgers
-
9
Kia EV9 GT marks world debut at LA Motor Show
-
10
Teen smoking, drinking decline, while mental health, dietary habits worsen
Lenovo Group Ltd. is in discussions to acquire International Business Machines Corp.’s low-end server business, and a deal may be signed within weeks, according to a person with direct knowledge of the matter.
Lenovo has completed due diligence, according to the person, who asked not to be identified because the talks are private. The companies failed to agree last year on a price for the assets, estimated to be worth $2.5 billion to $4.5 billion. Lenovo said Tuesday it’s in preliminary discussions on a possible acquisition without identifying the target or seller.
IBM is getting rid of businesses with lower profit margins and focusing on software and services to reverse slumping sales. Lenovo, which bought IBM’s personal-computer unit in 2005, is looking for acquisitions to counter falling global PC shipments by expanding into storage equipment and the servers that run corporate networks.
“This transaction would make sense for both parties,” said Alberto Moel, an analyst at Sanford C. Bernstein & Co. in Hong Kong. “The logic was there and that hasn’t changed.”
Brion Tingler, a New York-based spokesman for Lenovo, declined to comment. Anthony Guerrieri, a Shanghai-based spokesman for IBM, said the company “does not comment on rumors or speculation.”
Lenovo is only in talks to acquire the x86 server hardware business and not services, and a deal could be signed within a week if terms are agreed, the person said. The person didn’t have details on the current price or structure of the proposed deal.
A sale would continue IBM’s campaign to exit hardware businesses. Since selling the PC division, it has divested units such as printers and retail-store systems. IBM’s businesses also include storage computers and semiconductors.
In October, IBM reported sales fell for the sixth straight quarter on slowing demand for hardware. The company lost $713 million in its hardware business in the first nine months of last year, compared with $253 million in profit in the year-earlier period. That may have added pressure for IBM to sell the server unit, said Stephen Yang, a Hong Kong-based analyst at Sun Hung Kai Financial.
“Last quarter IBM server sales were very weak,” Yang said. “IBM may be looking to cut losses before the erosion gets worse.” (Bloomberg)
Lenovo has completed due diligence, according to the person, who asked not to be identified because the talks are private. The companies failed to agree last year on a price for the assets, estimated to be worth $2.5 billion to $4.5 billion. Lenovo said Tuesday it’s in preliminary discussions on a possible acquisition without identifying the target or seller.
IBM is getting rid of businesses with lower profit margins and focusing on software and services to reverse slumping sales. Lenovo, which bought IBM’s personal-computer unit in 2005, is looking for acquisitions to counter falling global PC shipments by expanding into storage equipment and the servers that run corporate networks.
“This transaction would make sense for both parties,” said Alberto Moel, an analyst at Sanford C. Bernstein & Co. in Hong Kong. “The logic was there and that hasn’t changed.”
Brion Tingler, a New York-based spokesman for Lenovo, declined to comment. Anthony Guerrieri, a Shanghai-based spokesman for IBM, said the company “does not comment on rumors or speculation.”
Lenovo is only in talks to acquire the x86 server hardware business and not services, and a deal could be signed within a week if terms are agreed, the person said. The person didn’t have details on the current price or structure of the proposed deal.
A sale would continue IBM’s campaign to exit hardware businesses. Since selling the PC division, it has divested units such as printers and retail-store systems. IBM’s businesses also include storage computers and semiconductors.
In October, IBM reported sales fell for the sixth straight quarter on slowing demand for hardware. The company lost $713 million in its hardware business in the first nine months of last year, compared with $253 million in profit in the year-earlier period. That may have added pressure for IBM to sell the server unit, said Stephen Yang, a Hong Kong-based analyst at Sun Hung Kai Financial.
“Last quarter IBM server sales were very weak,” Yang said. “IBM may be looking to cut losses before the erosion gets worse.” (Bloomberg)
-
Articles by Korea Herald
