Dell interested in IBM's low-end server business - WSJ

Mon Jan 20, 2014 7:55am EST

Dell logos are seen at its headquarters in Cyberjaya, outside Kuala Lumpur September 4, 2013. REUTERS/Bazuki Muhammad

Dell logos are seen at its headquarters in Cyberjaya, outside Kuala Lumpur September 4, 2013.

Credit: Reuters/Bazuki Muhammad

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(Reuters) - International Business Machines Corp is thinking of selling off its low-end server business and Dell Inc may be among potential bidders, the Wall Street Journal reported, citing sources.

A deal to sell all or part of the world's largest technology service company's x86 server business to China's Lenovo Group Ltd fell through as the two sides couldn't agree on a price, sources had said last year.

Whether Lenovo was still interested in the business and if there are any more potential buyers was not clear, the Wall Street Journal report said. (r.reuters.com/bup26v)

The low-margin, but high-growth businesses will help Dell, which has been trying to increase sales, gain scale as it focuses more on enterprise clients.

Founder Michael Dell succeeded in taking the company private in a $25 billion deal last year after prolonged trouble.

(Corrects source in paragraph 3 to Wall Street Journal from Bloomberg)

(Reporting by Devika Krishna Kumar; Editing by Joyjeet Das)

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Comments (1)
Savate wrote:
This makes no sense. Dell’s existing server line covers all of what IBM’s X86 line offers. I doubt Dell needs IBM’s manufacturing or supply chain to augment their existing server production infrastructure. Lenovo would be a better candidate for IBM’s server line, but they could not agree on a price. In any case, IBM has been looking to unload their commodity server business but can’t find takers.

Jan 20, 2014 11:16am EST  --  Report as abuse
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