Lenovo, the Chinese personal computer vendor, has paid $1.25 billion (€971 million) for IBM’s personal computing division, comprising $650 million in cash and $600 million in Lenovo shares. Following the deal, IBM will have an 18.9 percent stake in Lenovo.
At the same time as announcing the completion of the deal, Lenovo also said it had agreed the terms of a strategic investment of $350 million by private equity firms Texas Pacific Group, General Atlantic Group and Newbridge Capital.
The deal, which is to be voted on by shareholders on May 13, would see Lenovo issue $350 million worth of convertible preferred shares and unlisted warrants that can be converted into common shares of Lenovo.
In a statement, Lenovo added that following the private equity deal, the consortium members would appoint three additional board members of Lenovo.
Following the IBM acquisition, Lenovo has appointed a new management team headed by CEO Stephen Ward. Ward was previously a senior vice president at IBM and general manager of IBM’s Personal Systems Group. Yuanqing Yang, the former CEO of Lenovo, becomes chairman in succession to Liu Chuanzhi, who becomes a non-executive board director.
Lenovo is one of a clutch of pioneering Chinese companies aiming to provide serious competition to global brands. Others include Haier, the white goods manufacturer, and Tsingtao beer.
Lenovo joined the Stock Exchange of Hong Kong in 1994 and is currently listed on the Hang Seng Index and the MSCI China Free Index. Its American Depositary Receipts are traded over-the-counter in the US.