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Deal ranks Lenovo as world No 3 PC maker
(China Daily)
Updated: 2005-05-03 06:44

Lenovo became the world's third largest personal computer enterprise yesterday, thanks to its acquisition of IBM's PC unit.

"It's a historic event for Lenovo and marks the start of a new era in the global PC industry," said Yang Yuanqing, chairman of the Lenovo Group in Beijing.

According to Stephen Ward, the firm's chief executive officer, new products will be launched with the Lenovo brand name within weeks.

The new Lenovo now boasts the renowned "Thinkpad" laptop along with the already well-established Lenovo company moniker, and, will cover about a third of China's PC market. It will also allow the firm to hold a leading position in the world PC market.

According to the acquisition agreement signed between Lenovo Group and IBM five months ago, Lenovo paid US$1.25 billion for all of IBM's PC business, including US$650 million in cash and Lenovo's shares valued at US$600 million.

After the trade, IBM will be a major shareholder in Lenovo, holding 18.9 per cent of the US company's shares, with Lenovo assuming about half a billion US dollars in IBM corporate debt.

Lenovo's PC business is expected to produce an annual income of US$13 billion, selling some 14 million PCs annually.

The new senior management team comes from both companies. Yang, taking the place of Liu Chuanzhi, one of Lenovo's chief founders, has been appointed chairman of the board, while Liu remains in a position as a non-executive director.

Stephen Ward, former senior vice-president of IBM, will also act as director of the board.

(China Daily 05/03/2005 page1)



 
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