Lenovo wins nod from US to acquire IBM PC

It is learned on March 10 that after anxious waiting Lenovo Group Ltd won clearance from the Committee on Foreign Investment in the United States to acquire IBM's personal computer business. On March 9 Lenovo sent an email to the reporter's email box telling that Lenovo's storm in acquisition of IBM's personal computer business has come to a successful end.

New problems crop up unexpectedly

Under an agreement reached on December 8 last year in Beijing after 13 months of negotiations, Lenovo will acquire IBM's entire global desktop and notebook computer business at 1.25 billion US dollars. After the acquisition, Lenovo Group with a share ranking the ninth place in the global PC market will raise to the third place, only next to HP and Dell. After founding the new company's headquarters will move to New York. Lenovo Group, born and grown up in Zhongguancun, Beijing will land in the United States.

However, new problems cropped up unexpectedly when both sides were holding negotiations on their integral business. Three US Republican representatives asked for the review by the Committee on Foreign Investment in the Unites States, which considers security risks of foreign firms buying or investing in American companies. They questioned whether the IBM sale could encourage industrial espionage in North Carolina, where IBM and dozens of other technology firms conduct research and China can use the technology for military purposes. Because of this, the Committee on Foreign Investment in the Unites States decided to launch a full 45-day review on the acquisition and the transnational acquisition was stopped for the time being.

Integral work goes smoothly

On hearing that the acquisition has passed the review by the US government, Lenovo's Chairman Liu Chuanzhi, an NPC deputy attending the ongoing two conferences (i.e. the National People's Congress and the Chinese Political Consultative Conference), held a press conference in Beijing. Liu said Lenovo has good cooperation with IBM and the integral work goes smoothly. He is looking forward to the new Lenovo's role in the global IT business area.

Those who want to know Lenovo Group's business development pointed out what Lenovo did in the past two years was aimed at paving the way for making Lenovo a transnational corporation. All Lenovo did included the change of its trademark and English name, readjustment of corporate strategy, condensing business, staff-cutting, being specialized in personal computer, becoming cooperative partner for the Olympics, selling out information service business and adherence to the competitive direction in the areas of medium- and low-end computers.

Offer reference model for Chinese enterprises to have transnational acquisition

Analysts pointed out before China's entry into the WTO Chinese enterprises engaged mainly in transnational management by the way of joint venture and cooperation; after entry into the WTO transnational acquisition will become an important way for Chinese enterprises' transnational management. The Lenovo's acquisition of IBM's personal computer business is an important probe for Chinese local enterprises to become transnational corporations.

All the same, some experts pointed out discreetly that it is too early to say that Lenovo has successfully completed transnational acquisition and perhaps the Lenovo's experience can only be suitable for Lenovo. Kang Rongping and Ke Yinbing with the Institute of World Economics and Politics under China Academy of Social Sciences warned Chinese enterprises in their essay that it should be prudent to learn Lenovo's experience in transnational acquisition as the successful rate is low, only accounting for several per cent. In comparison the acquisition rule of "fewer food with more meals" may be more suitable for Chinese enterprises when making transnational acquisition.

By People's Daily Online