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Lenovo in M&A Talks; Report of IBM Deal

Thursday, 18 Apr 2013 | 10:10 PM ET
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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.

(Read More: IBM Earnings and Revenue Fall Short)

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.

(Read More: IBM Flashes Cash, Makes Storage Push)

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.

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