Lenovo reported to be in talks to purchase IBM Server X business

Lenovo is believed to be in talks with IBM to buy its x86 server business

Lenovo is believed to be in talks with IBM to buy its x86 server business.

Quoting a source involved in the discussions, Bloomberg reported that IBM's x86 server business may fetch $2.5bn to $4.5bn. However the sale of IBM’s System X (x86 server) business may still be several weeks away.

According to IDC worldwide server market share figures in the x86 and high end server markets increased for the first time in five quarters, suggesting businesses are buying low-end and high end servers.

IDC noted that IBM held onto the number one spot in the worldwide server systems market with 36.5% market share in factory revenue for Q4 2012, as revenue increased 3.1% year-on-year. IBM experienced significant improvements in demand for its System Z mainframes aided by a strong product refresh cycle.

However, in its latest financial results IBM reported revenue in its systems business fell 8% compared with last year.

The acquisition would boost Lenovo’s business footing. The supplier has grown its desktop PC business compared with the other main suppliers, and has the second largest market share, behind HP. IDC noted in its quarterly PC Tracker market share report that Lenovo continued to outpace the market, notably expanding shipments with its attack strategy.

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