Lenovo announced on Thursday that it plans to buy IBM's X86 server business, a low-end unit, for 2.3 billion U.S. dollars.
This is another cooperative project between Lenovo and IBM after Lenovo purchased IBM's personal computer business in 2005.
According to their agreement, about 2 billion U.S. dollars will be dealt in cash and the rest in Lenovo's shares.
Lenovo on Thursday suspended trading in Hong Kong.
IBM will continue to develop and improve Windows and Linux software for the X86 platform. After the deal, Lenovo will take over customer services and maintenance while IBM will continue to provide maintenance services on behalf of Lenovo for a limited period.
"This acquisition demonstrates our willingness to invest in businesses that help fuel profitable growth and extend our PC Plus strategy," said Yang Yuanqing, Lenovo's chairman and CEO. "With the right strategy, great execution, continued innovation and a clear commitment to the X86 industry, we are confident that we can grow this business successfully for the long-term, just as we have done with our worldwide PC business."
"This divestiture allows IBM to focus on system and software innovations that bring new kinds of value to strategic areas of our business, such as cognitive computing, Big Data and cloud computing," said Steve Mills, IBM senior vice president.
Technology research firms IDC and Gartner said Lenovo, the world's largest PC supplier, took 17 percent of global market share with total shipments of about 53 million units in 2013.