Lenovo and NEC officially tie the knot

by Pete Mason on 27 January 2011, 15:03

Tags: Lenovo, NEC (FRA:NEC1)

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Following murmurings last week, Lenovo and NEC have confirmed that they'll be joining their Japanese PC businesses together as part of a new joint venture.

The deal will see both NEC and Lenovo's Japanese operations become subsidiaries of new company NEC Lenovo Japan Group. China's Lenovo will take a 51 per cent share in the new company, while its Japanese partner will hold on to the remaining 49 per cent and get the choice of the first group CEO. As a part of the deal, Lenovo has agreed to issue NEC with $175 million (£110 million) worth of company shares.

Heading up the group will be NEC Personal Products president Hideyo Takasu, while Lenovo Japan President Roderick Lappin will step in as Executive Chairman.

NEC is currently the leader in PC sales in Japan, which is itself the third largest PC market in the world, though the company's presence outside of its home country is limited. The partnership will allow it to gain the benefit of the larger company's manufacturing, procurement and development resources.

Lenovo, on the other hand, has been surging up the global rankings and rapidly bearing down on second- and third-place Dell and Acer. As well as helping Lenovo to establish a foothold in Japan by leveraging NEC's well-established distribution network, it will add to the company's ever growing worldwide tally as it aims to become one of the top three.

Lenovo CEO Yang Yuanqing commented that, "the agreement with NEC is a perfect fit for our strategy. It reinforces our commitment to our core PC business while, at the same time, providing important new opportunities for growth in Japan".

The deal should be complete by the end of June this year, although both brands will continue to exist and both businesses will continue to operate largely as normal after this date. However, it opens the door to exploring other areas of collaboration in the future as a part of the ongoing relationship.



HEXUS Forums :: 1 Comment

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I think you mean “Knot” rather than “not” in the title.