IBM has announced it will buy Lenovo in a deal worth up to $1.2bn.

The deal, announced in a statement on Wednesday, was part of the company’s broader strategy to build a “cloud computing powerhouse” by 2020.

IBM will retain the business it has had since the end of 2015.

In January, Lenovo was spun off from its Chinese parent and is now owned by a consortium of Chinese technology companies, including Alibaba, Tencent and Tencent Capital.

Lenovo’s business has been hit hard by the slowing Chinese economy.

It said in November that its business revenues would fall by a third in the year to March 2019 compared with the same period in 2016.

It will continue to operate as a separate company in China, with the rest of its global business operating in the United States and in the European Union.

IBM is already working with Lenovo on cloud computing, with plans to open an IBM-owned cloud platform for use in research and development and other industries.

“Lenovo is an exceptional company and has been at the forefront of a number of technologies and business models that have been pivotal to IBM’s success over the past three decades,” said Mark Mulcahy, the president and chief executive of IBM.

“Lenovo has built a long and successful history of innovation in computing and data storage and analysis.

We look forward to working with them as they build on this legacy.”IBM has been working with Chinese technology giant Tencent on the creation of its cloud computing business.

China is a major customer for IBM, with sales of computing systems, computers and other products ranging from servers to servers and storage equipment, IBM said in a 2016 filing with the US Securities and Exchange Commission.

The company is also working with other Chinese companies, such as Tencent, on building cloud computing systems and services in the country.