IBM server
(Anatoliy Babiy)

UPDATE: 1/25/14, 11:15 a.m. EST. Additional information on Hogan Lovells’ role advising IBM has been added to the 10th paragraph of this story. 1/27/14, 3:00 p.m. EST. O’Melveny & Myers partner Theodore Kassinger has been retained as CFIUS counsel to IBM.

Almost a decade after paying $1.75 billion to buy the personal computer unit of International Business Machines Corp., China’s Lenovo Group has agreed to acquire the Armonk, N.Y.–based global computing giant’s low-end server division for $2.3 billion.

IBM, the world’s largest provider of technology services, announced Thursday the sale of its “x86 server business” to Beijing-based Lenovo, which in late 2012 surpassed Dell and HP as the world’s largest personal computer maker. About $2 billion in cash and $300 million in stock are changing hands in the transaction.

New York–based Cravath, Swaine & Moore corporate partner George Schoen is leading a team from the firm advising longtime client IBM, which has turned to Cravath to handle a number of acquisitions and divestitures over the years.

Cravath’s relationship with Big Blue dates back nearly 50 years, when IBM hired the firm to handle a long-running antitrust investigation by the Justice Department. Cravath’s recent work for the company includes a Schoen-led team handling IBM’s $1 billion acquisition last summer of Israeli fraud protection and security software provider Trusteer.

Cravath also represented IBM last year on its $2 billion purchase of cloud-computing company SoftLayer Technologies and $1.3 billion buy of human resources software provider Kenexa. Cravath further bolstered its IBM ties nearly a year ago this month by hiring the company’s former assistant general counsel for patent law and strategy, David Kappos, shortly after he stepped down as director of the U.S. Patent and Trademark Office.

Other Cravath lawyers currently working on the IBM server unit sale include employee benefits partner Jennifer Conway, tax partner J. Leonard Teti II, environmental partner Matthew Morreale, real estate practice area attorney Joyce Law and associates Matthew Cantor, Andrew Carlon, Nicholas Dorsey, Kenneth Gerold, Keith Hallam, Jarrett Hoffman, Rachel Kiwi, James Pickel Jr., Maya Rosenthal-Larrea, Aaron Suh and Allison Wein.

Thursday’s deal with Lenovo comes on the heels of IBM issuing a disappointing fourth- quarter earnings report and announcing that its top executives would forgo their bonuses for 2013. IBM also announced this month that it would invest $1.2 billion to expand its cloud-computing capabilities and another $1 billion to bolster its supercomputer division amid a broader shift away from hardware and toward the more profitable software and services sectors.

IBM’s latest deal with Lenovo is reminiscent in some ways of the one completed a decade ago that allowed the Chinese company to dramatically increase its presence in the U.S. market by picking up IBM’s ThinkPad division.

A team of lawyers from Latham & Watkins also advised IBM on that transaction in connection with the company’s ultimately successful effort to secure the requisite U.S. security clearances prompted by its decision to sell a significant asset to a Chinese company. (IBM, a major U.S. government contractor, secured a $1 billion cloud-computing contract with the U.S. Department of the Interior last year after losing out to Amazon in the bidding for a $600 million pact with the Central Intelligence Agency.)

Robert Weber, an occasional commentator on in-house and other legal industry issues, has served as IBM’s general counsel for the past eight years. Gregory Bomberger, a senior in-house M&A counsel at IBM, has taken the lead for the company on its latest deal with Lenovo. Hogan Lovells in Hong Kong is also advising IBM on the deal, which is likely to trigger a review by the Committee on Foreign Investment in the U.S.

Bloomberg reported this week that such a review would focus on a variety issues, including the proximity of certain facilities being sold by IBM to U.S. military bases and research laboratories. As part of the acquisition, Lenovo will take on about 7,500 employees currently working for IBM in Raleigh, Shanghai, Shenzhen and Taipei.

Christopher Padilla, vice president of government programs at IBM, told The Wall Street Journal this week that both his company and Lenovo support the CFIUS process and are “confident of a positive outcome” for their current deal.

Like Cravath and IBM, Cleary Gottlieb Steen & Hamilton is reprising an earlier role for Lenovo on the completion of its personal computer purchase in 2005. The latter firm is again serving as counsel to Lenovo on its server buy through Cleary M&A partners Christopher Austin and Glenn McGrory in New York and Hong Kong–based corporate partner Freeman Chan.

Chan represented Lenovo three years ago when it entered the European market through its $909 million acquisition of German computer and electronics maker Medion, according to our previous reports. Jay Clemens serves as Lenovo’s general counsel, having joined the company in 2012 after the departure of former legal chief Michael O’Neill, an ex-Howrey partner hired by the computer maker in 2007.

U.S. Senate records show that Lenovo has turned to Akin Gump Strauss Hauer& Feld for lobbying work in the past, with the last $50,000 payment to the firm coming in the fourth quarter of 2011 for advice on government procurement and technology issues. Covington & Burling has handled lobbying work for IBM, but hasn’t received any payments from the company since 2010, according to Senate filings.

Dell, whose $24 billion going-private sale last year yielded roles for a bevy of Am Law 100 firms, was also reportedly vying with Lenovo for IBM’s server business.