Facebook Ios Androidgagliordizdnet: In a major victory for the US-China trade war, on Wednesday Lenovo cleared final regulatory scruples to acquire IBM’s server business in an $2.3 billion deal announced last month. The deal is pending approval from Chinese regulators and the European Commission.
IBM launched the lawsuit against Lenovo back in October after failing to reach an amicable agreement with their corporate rival over a strategic partnership that could have allowed both companies to grow as separate entities as well as compete against each other in domestic markets such as China and India. In the end, Lenovo’s executives decided that pursuing the lawsuit in US courts would be a waste of time, money and effort.
IBM has been the sixth largest server vendor worldwide. Lenovo said that it will integrate IBM’s company-wide portfolio of servers and storage products for both enterprise and cloud environments in order to help customers manage their IT spend more efficiently.
Lenovo is already one of the biggest players in the global server market, after its acquisition of IBM’s PC division in 2005 and Motorola Mobility in 2014. The firm currently owns 17% of the worldwide market share, with HP Inc leading the pack with 16%.
Lenovo has been eyeing the acquisition of IBM’s server business for about two years now. The computer giant attempted to acquire the unit in 2014, but it withdrew the deal after failing to garner approval from regulators. In 2012, Lenovo tried to buy its rival for $2.3 billion debt-free but failed due to regulatory issues.
The acquisition of IBM’s x86 unit will help Lenovo further expand its businesses and make it a more formidable competitor in the PC, server and mobile industry. Last month, the company announced that it plans to enter the smartphone market by launching a Vibe smartphone running on ZUK’s ZUI 2.0 Android OS in China.
Lenovo also said that it plans to make Motorola its flagship brand for smartphones in the US later this year. The company is also set to launch a smartphone later this month in India running on Firefox’s operating system.
In the server market, Lenovo is already one of the biggest players, with a little over 18% market share. The company’s server business currently generates revenues of $2.6 billion per year and employs around 11,000 people all over the world.
The deal, which is expected to close in the first quarter of 2019, will not only further strengthen Lenovo’s position in China but also give it an edge over its rivals in other markets such as Brazil, Russia and South Africa.
Lenovo is trading at $8.34, up 26.75%, in after-hours trading. IBM is trading at $147.91, up 4.06%.
