Lenovo Group Limited (OTCMKTS:LNVGY), International Business Machines Corp (NYSE:IBM) server deal talks come to naught
Northern, WI 05/03/2013 (gdpwatch) – Lenovo Group Limited (OTCMKTS:LNVGY) (Closed: $17.82, Down by 2.09%)’s negotiations with International Business Machines Corp (NYSE:IBM) (Closed: $202.39, Up by 1.38%), to buy parts of the latter’s server division collapsed as the two parties could not reach a consensus about the price, said a person in the know.
Wong Wai Ming, Lenovo’s Chief Executive Officer was in the United States for these talks that were held over the past week. A person who chose to remain anonymous said that Ming returned to Hong Kong sans an agreement. The person said that there is a possibility that the talks will resume at a later date.
PC manufacturing top-slots
A spokesperson for IBM, James Sciales, as well as a Lenovo spokesperson, Jeffrey Shafer said declined commenting on the issue. While Lenovo was not willing to go beyond the lower-end of the $2.5 billion-$4.5 billion range, IBM was seeking a much higher evaluation, said the person without providing additional details. Lenovo had acquired IBM’s personal computer unit in 2005. This had helped in bringing the Beijing-based company to second slot in the PC manufacturing space and its servers operate on similar x86 processors.
In diversification mode
Lenovo is expanding into devices such as tablet computers, televisions and smartphones. Last year it had associated itself with EMC Corp to up its storage equipment and corporate network server sales. Via a Hong Kong stock exchange statement on April 19, the company said that it was in first-stage discussion with an undisclosed party, about a probable acquisition. In that statement, Lenovo said that no material terms had been agreed upon and that there was no definitive agreement between the two companies.