IBM-Lehman fund buys stake in Chinese software firm

IBM and Lehman Brothers are investing $17 million in a Hong Kong-listed Chinese software company from a fund the two companies established last year.

IBM and US bank Lehman Brothers are investing HK$132 million ($17 million; €12.5 million) to acquire 7.7 percent of the issued share capital of Hong Kong-listed Kingdee International, a software company based in Shenzhen.

They are buying 35 million shares at HK$3.79 a share, or a 46 percent discount to the last trading price on 28 May, when trading was suspended before the sale announcement.

IBM and Lehman jointly established a $180 million China investment fund last year to invest in Chinese enterprises. Kingdee is the first investment for the fund aimed at capitalising Lehman’s private equity capabilities and IBM’s operational and technology expertise, according to a statement.

As part of the deal, IBM and Kingdee are expected to collaborate and they will set up a committee to implement and monitor cooperation plans.