Lenovo Group acquires IBM's PC business
Beijing: China's largest personal computer maker Lenovo Group Ltd has acquired US-based IBM's PC-making business for 1.25 billion US dollars. This is perceived as a major breakthrough in China's ambition to become a key global player in information technology sector.

As per the agreement, Lenovo will acquire IBM's entire global desktop and laptop computer research and development and manufacturing business. In return, Lenovo Group will pay IBM 650 million US dollars in cash and allot 600 million US dollars worth of Lenovo stocks, which will make IBM the second largest shareholder in Lenovo with 18.9 per cent shares. Additionally, Lenovo will assume approximately 500 million US dollars of net balance sheet liabilities from IBM.

The purchase will make Lenovo Group the third largest PC make worldwide with an annual revenue exceeding 10 billion US dollars, said Lenovo Chairman, Liu Chuanzhi.

The landmark deal ends an era for the world's largest computer company and kicks off a new age in which China's top PC maker Lenovo emerges on the world stage as a major PC brand and IBM as its strategic partner, industry analysts said.

Lenovo will have combined annual PC revenue of approximately 12 billion US dollars and volume of 11.9 million units, based on 2003 business results -- a fourfold increase in Lenovo's current PC business.

Stephen M Ward, Jr, currently IBM senior vice president and general manager of IBM's Personal Systems Group, will serve as the chief executive officer of Lenovo following completion of the transaction. Yuanqing Yang, currently vice chairman, president and chief executive officer of Lenovo, will serve as the chairman of Lenovo post-transaction.
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