IBM and Lenovo Deal Finalized, IBM’s PC Unit Acquired by Lenovo
IBM and Lenovo have confirmed the plans to merge PC businesses of each other. The transaction will result in Lenovo’s buy-out of IBM’s PC Business for about $1.75 billion and will allow Lenovo to become the world’s No. 3 maker of PCs with strong presence across the world.
Under the terms of the agreement Lenovo will not only be able to sell desktops and notebooks under IBM and “Think” brand-names for the next five years, but will also get IBM’s sales network. Additionally, Lenovo will become preferable supplier of computers to IBM, who will then offer the PCs to its business clients worldwide. Furthermore, IBM’s leasing and maintenance units will be preferable providers of appropriate services to Lenovo and its clients.
Lenovo – Supplier of Nearly 12 Million PCs Yearly
Together with IBM’s PC business, Lenovo will have combined annual PC revenue of approximately $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 in product differentiation, ensuring greater innovation and enhanced product selection for customers.
As part of the transaction, Lenovo and IBM will enter a broad-based, strategic alliance in which IBM will be the preferred services and customer financing provider to Lenovo. Lenovo will be the preferred supplier of PCs to IBM, enabling IBM to offer a full range of personal computing solutions to its enterprise and small and medium business clients.
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