Lenovo Group Ltd’s (聯想) negotiations to buy parts of International Business Machines (IBM) Corp’s server division broke down after the two sides could not agree on a price, a person familiar with the discussions said.
Lenovo chief financial officer Wong Wai Ming (黃偉明), who was in the US this past week for talks, left for Hong Kong without an agreement, said the person, who declined to be identified because the negotiations are private.
The talks could resume later, the person said.
James Sciales, a spokesman for IBM, and Jeffrey Shafer, a spokesman for Lenovo, both declined to comment.
Lenovo wanted to pay toward the low end of the US$2.5 billion to US$4.5 billion range that Bloomberg News reported on April 19, while Armonk, New York-based IBM sought a substantially higher valuation, the person said, without providing details.
In 2005, Lenovo purchased IBM’s PC unit, which helped make the Beijing-based company the world’s second-largest PC manufacturer. The servers rely on similar x86 processors.
The breakdown of talks was reported by Fortune on Wednesday.
Lenovo shares fell 3.4 percent to HK$6.85 at the noon break in trading on the Hong Kong Stock Exchange yesterday, their largest decline since April 12.
Lenovo is diversifying into devices including TVs, tablets and smartphones, and allied itself with EMC Corp last year to boost sales of storage equipment and servers that run corporate networks.