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IBM resumes talks to sell x86 unit to Lenovo, Dell

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Ryan Vlastelica, Devika Krishna Kumar

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IBM: May still sell its x86 unit to Lenovo or Dell.

IBM: May still sell its x86 unit to Lenovo or Dell. Photo: AFP

Lenovo has resumed discussions to buy IBM's low-end server unit, according to a source familiar with the matter, while Dell may still be in the running.

IBM and Lenovo were in discussions to buy the division last year, but no deal was made as they couldn't agree on a price, sources have said.

China's Lenovo confirmed it was in preliminary negotiations with a third party in relation to a potential acquisition but added that no material terms have been agreed.

An IBM spokesman said the company wouldn't comment on the reports.

Another source with direct knowledge of the matter told Bloomberg that Lenovo was in serious discussions to buy the unit and that a deal may be signed within weeks.

Meanwhile, the Wall Street Journal said Dell may also be among the potential buyers, though it was unclear how serious Dell was.

Dell went private in a $US25 billion deal last year, following prolonged troubles at the computer maker.

IBM's x86 server business sells servers used to power corporate data centres. Last year, Lenovo put the value of the division at less than $US2.5 billion, according to the Wall Street Journal.

In 2004, Lenovo purchased IBM's global PC operations in a cash, stock and debt deal worth $US1.75 billion at the time.

Reuters

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