Lenovo: IBM x86 acquisition 'tough'

Revealing comment made by executives at Ingram Micro ONE shindig

Lenovo's acquisition of IBM's x86 server unit has been tough, Sammy Kinlaw, executive director of channel sales at Lenovo, told delegates at the Ingram Micro ONE event in Las Vegas this week.

The deal was struck in January this year, but it wasn't until mid-August that it was finally approved by the US Committee on Foreign Investment. This long wait was on top of the initial talks between the two firms breaking down last year after disagreements about price.

Kinlaw acknowledged that the acquisition hasn't been plain sailing for Lenovo, but said that now that approval has been given, the two firms can move quickly to execute on the deal.

"The IBM x86 server acquisition has been tough," he told delegates. "It's taken a long time to get this deal closed, but we are right around the corner. We are very, very close to this thing going down."

The $2.3bn acquisition sees Lenovo taking on a business in a sector that is declining. On top of this, when the deal was struck in January, IBM had seen overall sales decline for seven consecutive quarters.

But Kinlaw is confident that the Lenovo will win the business back.

"The government has approved the deal, which is really what we were waiting for to happen. Once the deal is closed, we fully believe we can make this a $5bn (£3.1bn) enterprise business with higher-margin to PC in one year."

He added that the timing is right for Lenovo to achieve this.

"If you look at what's happening in the market and the attack that's going to happen with Microsoft's end of service for Windows Server 2003 demand, it's perfect timing for us."