Lenovo says $2.1 bn IBM x86 server deal to close on Wednesday

Lenovo Group Ltd (0992.HK) will close its acquisition of International Business Machines Corp's (IBM) (IBM.N) x86 server division on Oct 1 for $2.1 billion, giving the Chinese tech firm the firepower to win business clients from US rivals, Reuters reported.

The closing purchase price is lower than the $2.3 billion announced in January because of a change in the valuation of inventory and deferred revenue liability, Lenovo said. Roughly $1.8 billion will be paid in cash and the remainder in stock.

The purchase is Lenovo's latest since overtaking Hewlett-Packard Co (HP) (HPQ.N) as the world's top personal computer (PC) maker last year, in its quest to diversify away from a steadily shrinking PC market. Earlier this year, Lenovo also said it would pay $2.9 billion for Google Inc's (GOOG.O) Motorola smartphone unit.

In an interview, Lenovo Chief Executive Yang Yuanqing said the IBM deal opened a new "growth engine" for his company. He said he expected the x86 unit to bring in $5 billion in its first year and deliver margins higher than the 4 percent of Lenovo's PC business.

Read more on the Reuters website.