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Lenovo Case

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Lenovo to Acquire IBM Personal Computing Division
ARMONK, N.Y. and BEIJING — Dec. 7, 2004 — IBM and Lenovo Group Limited • Creates world's third-largest PC business with approximately US$12 billion annual revenue for 2003 • Global business with worldwide reach, powerful brand name, balanced product offerings and leading R&D capabilities • Long-term strategic alliances between Lenovo and IBM in PC sales, service and financing worldwide • Worldwide headquarters in New York; principal operations in Beijing and Raleigh, North Carolina • Transaction of US$1.25 billion in cash, equity; total transaction consideration of approximately US$1.75 billion • IBM to take 18.9 percent equity stake in Lenovo; transaction expected to be completed in second quarter 2005
Lenovo Group Limited, the leading Personal Computer brand in China and across Asia, and IBM today announced a definitive agreement under which Lenovo will acquire IBM's Personal Computing Division to form the world's third-largest PC business, bringing IBM's leading enterprise-class PC technologies to the consumer market and giving Lenovo global market reach beyond China and Asia.
Lenovo will have combined annual PC revenue of approximately US$12 billion and volume of 11.9 million units, based on 2003 business results — a fourfold increase in Lenovo's current PC business. Lenovo's new PC business will benefit from a powerful worldwide distribution and sales network covering 160 countries, global brand recognition through the combination of IBM's highly regarded "Think" brand notebook franchise and Lenovo's leading brand recognition in China, enhanced service and support for consumers and enterprise clients, and consumer strength and market leadership in China, the world's fastest growing IT market. After the transaction is completed, Lenovo will boast leading notebook enterprise offerings, leading R&D and expertise...

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