* Lenovo suspends shares pending an announcement
* Deal could be announced as early as Thursday
* Lenovo could pay between $2-2.5 bln for IBM's unit
Jan 23 Lenovo Group Ltd is nearing an
agreement to buy International Business Machines Corp's
low-end server business for $2-2.5 billion, a deal that would
help the Chinese company counter the shrinking personal
computers market, people familiar with the matter said.
The timing of the deal was uncertain, with one of the people
saying an announcement could come as early as Thursday. The
final price could be close the bottom end of the range, the
Lenovo, the world's biggest PC maker, halted trading in its
shares pending an announcement in respect of a transaction.
The potential deal comes after IBM missed revenue
expectations for the fourth consecutive quarter when it reported
earnings earlier this week.
A deal for IBM's x86 servers, which power corporate data
centers, fits with Lenovo's attempts to remould itself as a
force in mobile devices and data storage servers. It also helps
IBM's shift away from hardware towards software and services.
Reuters had reported on Tuesday that Lenovo had resumed
talks to buy the IBM's lower-margin unit after failing to reach
an agreement last year following differences on pricing.
Lenovo's purchase of IBM's Thinkpad PC business in 2005 for
$1.75 billion became the springboard for its leap to the top of
global PC maker rankings.
Lenovo said earlier this week that it was in preliminary
talks about an acquisition. It declined to name the seller but
said it was making the statement in response to reports about
its potential acquisition of a server business.
Recent reports have also indicated that Fujitsu Ltd
and Dell Inc are also potentially interested in buying the
IBM declined to comment, while Lenovo was not available for
The timing of the deal was first reported by the Wall Street
Journal, citing sources.