IBM Personal Computer Company

IBM Personal Systems Group

Company type	Subsidiary (formerly)
Industry	Personal computers
Predecessor	IBM Personal Computer Company
Founded	1992
Defunct	May 3, 2005 (2005-05-03)
Fate	Acquired by Lenovo
Headquarters	New York City (after acquisition) , United States

The announcement of Lenovo's acquisition of IBM's Personal Systems Group, the division responsible for IBM's PC business, took place on December 7, 2004, with the transaction finalized on May 3, 2005.

Background

In September 1992, IBM reorganized its personal computer manufacturing operations by establishing the IBM Personal Computer Company (IBM PC Co.), a fully owned subsidiary operating independently. This reorganization was prompted by a significant decline in profit margins due to fierce price competition within the PC industry during 1992. By the middle of 1993, IBM PC Co. had been divided into several segments, including Ambra Computer Corporation and the IBM Power Personal Systems Group, which focused on IBM-compatible clone computers and PowerPC workstation systems, respectively.

By 1998, IBM consolidated its enterprise-oriented Personal Systems Group from IBM PC Co. with its Global Services unit responsible for personal computer consulting and customer support, resulting in the formation of the unified IBM Personal Systems Group. After experiencing considerable losses in retail market share to rivals such as Compaq and Dell, IBM discontinued retail PC sales in 1999 and fully integrated IBM PC Co. into the IBM Personal Systems Group.

On September 14, 2004, IBM and LG announced plans to dissolve their South Korean PC joint venture by the end of that year; this decision was independent of previous bribery accusations. The joint venture had included LG's Xnote laptop series, which LG eventually divested in 2012.

Acquisition

Chinese technology company Lenovo declared its intention to acquire IBM's Personal Systems Group on December 7, 2004, in an all-stock transaction valued at $1.3 billion. Following initial reviews concerning national security in early 2005, clearance was granted by both the Committee on Foreign Investment in the United States and the United States Department of Justice, allowing the deal to close on May 3, 2005. Subsequently, Lenovo relocated its global headquarters from Beijing to New York City. By 2009, all products under the Think brand were rebranded to carry Lenovo's name.

Starting in 2006, Lenovo began reducing its association with the IBM brand. In 2007, IBM divested $85 million worth of shares in Lenovo. In December of that year, Lenovo employees ceremoniously replaced IBM labels on their devices with Lenovo branding during an event known as "Lenovo Pride Day."

Further developments

In 2014, Lenovo expanded its enterprise hardware lineup by acquiring IBM’s x86-based server business (System x) for . This acquisition bolstered Lenovo’s position in the global server market.

Initially doubtful about this purchase, columnist Tim Bajarin from PC Mag later praised Lenovo for successfully integrating IBM’s server division while retaining essential personnel.

In a 2011 interview, former IBM CEO Samuel J. Palmisano disclosed his preference for Lenovo over Dell and private equity buyers due to strategic fit. The agreement aligned with Chinese government objectives of advancing its companies globally and enhanced IBM’s foothold within China.

See also

• List of mergers and acquisitions by IBM
• Acquisition of Sun Microsystems by Oracle Corporation
• Acquisition of Activision Blizzard by Microsoft