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IBM will sell its PC division to China-based Lenovo and take a minority stake in the former rival in a deal valued at $1.75 billion, the companies announced Tuesday.

The two companies plan to form a complex joint venture that would make Lenovo the third-largest PC maker in the world, behind Dell and Hewlett-Packard, but still give IBM a hand in the PC business. The acqusition is expected to be completed in the second quarter of 2005.

This will get IBM free from Microsoft – they can now pursue the PowerPC line for their servers, and ship Linux as much as they want.

The user will have to get their driver updates from http://www.thinkpad.cn/ from now one…