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China's Lenovo buys IBM's PC business
Hong Kong — China's biggest computer maker, Lenovo Group, said Wednesday it has acquired a majority stake in IBM Corp.'s personal computer business for $1.25-billion (U.S.).
IBM will keep an 18.5 per cent stake in the PC business, which was a pioneer in bringing desktop computing into widespread use in the early 1980s but which hasn't been a dominant force in the industry for several years.
Lenovo's chairman Liu Chuanzhi said Lenovo is taking over IBM's desktop PC business, including research and development and manufacturing. The acquisition would make Lenovo the third-largest PC company in the world, he said.
Like other major Chinese manufacturers hoping to expand overseas, Lenovo is planning to leverage a well-known foreign brand name. Mr. Liu said the company would be entitled to freely use IBM's brand name in five years' time.
Lenovo is China's biggest computer maker, claiming a 27 per cent market share, and is also the biggest in Asia. Its shares are traded in Hong Kong.
The announcement Wednesday followed reports that a deal was imminent. On Tuesday, Lenovo's Hong Kong unit confirmed it was in talks with a “major international company in the information technology business” but hadn't named the company, saying the negotiations were confidential. |
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