Lenovo Group will acquire IBM`s PC division for $1.25 billion, making Lenovo the third largest PC business in the world.
According to an official statement from IBM chairman and CEO Sam Palmisano, the deal will comprise $650 million in cash as well as $600 million in Lenovo shares, giving IBM an 18.9% stake in Lenovo, China`s largest PC manufacturer.
Speaking at a press conference in Beijing, Lenovo chairman Liu Chuanzhi confirmed the deal, adding that it included IBM`s entire global desktop and laptop computer business.
"This will make Lenovo the third-largest computer company in the world with annual revenues of over $10 billion."
Palmisano says the deal forms part of the company`s strategy to retain market position in a rapidly changing environment. "For some time we have said that there are two ways to create long-term value for clients and shareholders in the IT industry: invest heavily in R&D and be the high-value innovation provider for enterprises, or differentiate by leveraging vast economies of scale, high volumes and price."
While the deal will better position Lenovo to capture opportunities in the PC industry, it will also give IBM a stronger position in China, adds Palmisano.
IBM is third in the global PC market with 5.6%, behind market leader Dell`s 17% and Hewlett-Packard`s 15%.
IBM SA said it had nothing to add to Palmisano`s official statement.
Share
