LENOVO Group Ltd. will close its acquisition of International Business Machines Corp.’s x86 server division Wednesday for US$2.1 billion, giving China’s biggest personal computer maker a major asset as it expands its offerings for business clients.

    Lenovo said yesterday that it has gained all the necessary approvals for its acquisition of International Business Machines’ low-end computer server business, as the Chinese personal computer giant seeks new engines for growth beyond the saturated personal computer market.

    The IBM represents Lenovo’s big step to expand its offerings beyond personal computers and other consumer devices. While Lenovo already sells servers, it is still a minor player globally, and the acquisition of IBM’s x86 server unit turns Lenovo into a more competitive player in the roughly US$50 billion server market.

    Lenovo said yesterday that the closing purchase price for the IBM server deal is lower than the previously announced US$2.3 billion in part because of a change in the valuation of the IBM unit’s inventories. There are no changes to the previously announced terms of the deal, the company said. The company expects the deal to close Wednesday.

    Lenovo, which last year overtook Hewlett-Packard Co. as the world’s largest PC maker, is expanding its operations through two multi-billion-dollar acquisitions: the IBM server deal and another deal to buy the Motorola Mobility handset business from Google Inc. for US$2.91 billion. The Motorola deal hasn’t closed yet.

    The expected completion of the deal is in line with the timetable set earlier by Lenovo. The company has said that it planned to close the deal by the end of this year. In August, Lenovo said its proposed acquisition of the IBM unit passed the government panel in the United States that screens deals with possible national security implications.

    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 US$5 billion in its first year and deliver margins higher than the 4 percent of Lenovo’s personal computer business.

    “In the large and medium enterprise space, we can now fully leverage IBM technology to compete with brands like Hewlett-Packard and Dell,” Yang said. (SD-Agencies)