Lenovo has agreed to buy IBM's server business for $2.3 billion, the two companies announced early Thursday.
The Chinese personal computer manufacturer will pay IBM about $2 billion in cash and the rest in stock for its x86 server business. The deal, which is still pending regulatory review, marks the largest international tech acquisition ever from a Chinese company.
See also: IBM: In 5 Years, Buying Local Will Beat Buying Online
The two companies had reportedly been in talks for this acquisition in early 2013, but those discussions reportedly broke down over price. IBM was looking for as much as $4.5 billion for the business; Lenovo was looking to pay closer to $2.5 billion. It looks like Lenovo won out.
IBM, whose sales have suffered in recent years from slowing hardware demand, framed the acquisition as allowing it to focus more on its "system and software innovations." Lenovo, on the other hand, expressed confidence that it can grow the server business over time.
"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," Yang Yuanqing, chairman and CEO, Lenovo, said in a statement.
This isn't the first billion-dollar deal between the two tech companies. Lenovo previously acquired IBM's ThinkPad personal computing business for $1.75 billion in 2005.
As part of the acquisition, some 7,500 IBM employees in the U.S. and abroad are expected to have the option to work for Lenovo.