Lenovo in M&A Talks; Report of IBM Deal
Lenovo Group said on Friday it was in preliminary talks about a potential acquisition, following a media report that IBM Corp was negotiating the sale of its x86 server hardware business to the Chinese computer maker.
IBM wants $5 billion to $6 billion for the business, which sells low-priced servers traditionally used to power large corporate data centers, said technology news site CRN, citing a high ranking industry executive.
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Lenovo did not identify the acquisition target.
"As at the date of this announcement, no material terms concerning the potential acquisition Have been agreed," the company said in a statement to the Hong Kong stock exchange.
Beijing-based Lenovo acquired IBM's PC unit in 2005 in a $1.25 billion stock and cash deal.
IBM Chief Financial Officer Mark Loughridge said the company would not respond to rumors when asked about the CRN story on a post-earnings conference call on Thursday.
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IBM, the world's largest technology services company, reported an increase in first-quarter earnings, but missed estimates due to the depreciation of the Japanese yen.