Lenovo and IBM announced today that conditions for Lenovo’s acquisition of IBM’s x86 server business have been satisfied and the parties anticipate they will begin closing the transaction effective on October 1, 2014. The closing purchase price is lower than the $2.3 billion announced in January because of a change in the valuation of inventory and deferred revenue liability, Lenovo said. Roughly $1.8 billion will be paid in cash and the remainder in stock.

The acquisition will make Lenovo the third-largest player in the global x86 server market.

Lenovo is acquiring System x, BladeCenter and Flex System blade servers and switches, x86-based Flex integrated systems, NeXtScale and iDataPlex servers and associated software, blade networking and maintenance operations. IBM will retain its System z mainframes, Power Systems, Storage Systems, Power-based Flex servers, PureApplication and PureData appliances.

In 2005, Lenovo had acquired IBM’s PC business, including the ThinkPad line of PCs. Lenovo’s pending acquisition of Motorola Mobility from Google will make it the hird-largest smartphone maker, while further strengthening its position as a top-three maker of smart connected devices – PCs, tablets and smartphones.

Lenovo and IBM have also established a strategic alliance where Lenovo will serve as an Original Equipment Manufacturer (OEM) to IBM and resell selected products from IBM’s storage and software portfolio, including IBM’s entry and midrange Storwize storage product family, Linear Tape Open (LTO) products, IBM Flash storage arrays and elements of IBM’s system software portfolio, including Smart Cloud, General Parallel File System and Platform Computing solutions.

Lenovo is buying IBM's x86 server business intact and is committed to following the IBM x86 product roadmap, including Flex and x86-based PureFlex integrated systems. Upon close, IBM will continue to provide maintenance delivery on Lenovo’s behalf for an extended period of time.

The global team of the IBM x86 server business will be organized under Lenovo’s Enterprise Business Group. Adalio Sanchez led the x86 server business at IBM and will continue in this capacity at Lenovo, as senior vice president of Enterprise Systems, reporting to Gerry Smith.

The transaction is expected to close in most other countries later this year, with the few remaining countries following in early 2015.