Lenovo, China`s largest PC company, has completed a $1.25 billion acquisition of IBM`s Personal Computing Division (PCD).
Lenovo, which already has a third of the Chinese PC market and shares in enterprise PC markets around the world, says this deal makes it a new international IT competitor and the world`s third-largest personal computing company.
The PCD acquisition, first announced in December, means, according to newly named Lenovo CEO Stephen Ward, that the company will have combined annual PC revenue of about $13 billion and volume of about 14 million units.
Ward says Lenovo expects immediate synergies through complementary customer bases, product offerings and geographic coverage, among other things.
Ward was previously senior VP and GM of IBM`s Personal Systems Group.
Yuanqing Yang has been appointed Lenovo chairman, replacing founder Liu Chuanzhi, who led the company for 11 years and who is now a non-executive director.
IBM is to record a pre-tax gain of about $1 billion on the sale, which will be included in the group`s second-quarter results.
Of the sum Lenovo paid for PCD, $650 million was in cash, while $600 million was in Lenovo Group shares, which are traded on Hong Kong`s stock exchange.
Lenovo is also to assume net balance sheet liabilities of about $500 million.
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