Lenovo buys IBM's server business in greater China's it acquisition

BEIJING, Jan 23 (Reuters)-Lenovo Group, the world's largest manufacturer of PCs, closed deal to buy the unit of IBM servers in a deal expected long ago and valued at $ 2.3 billion, the largest acquisition ever made by a Chinese technology company.
Lenovo will pay 2.07 billion dollars in cash and the rest in shares of computer maker based in Beijing, the company said in a statement to the Hong Kong stock exchange on Thursday.
The deal surpasses the acquisition by Baidu of 91 Wireless, formerly owned by NetDragon Websoft, by 1.84 billion dollars last year, according to data from Thomson Reuters, and highlights the growth of technology companies in the country as they assess the international expansion.
The acquisition will allow Lenovo to diversify its revenue beyond the troubled PC segment and reshape itself as a growing force in mobile devices and data storage servers.
The sale allows IBM to get rid of its low margin business, which sells x 86 servers less powerful and slower than higher-margin offerings and focus on switching to more profitable software and services.
The acquisition by the Lenovo ThinkPad IBM's PC business in 2005 by 1.75 billion dollars became the springboard for the company to reach the top of the world ranking manufacturers of PCs.
The market bet that Lenovo will have a similar success with its new acquisition, which is partly reflected in the valuation of 9.44 percent in its shares this year.