Lenovo has completed its US$1.25 billion acquisition -- comprising some US$650 million in cash and US$600 million in Lenovo Group shares -- of IBM's PC Division.
IBM’s ownership in Lenovo upon closing is 18.9 percent, the companies said in a statement. Also, Lenovo will assume about US$500 million of net balance sheet liabilities from IBM.
"The papers were signed and monies transferred on Sunday our time - to be effective from 1 May, ahead of schedule, and to a very excited group of 19,000 staff worldwide, starting with celebrations today in Australia," an IBM Australia spokeswoman said.
Alan Munro would head the local operation as Lenovo managing director for Australia and New Zealand, she said.
"In Australia, Alan has made a commitment to evaluate the Lenovo products and look at ways to expand our portfolio and reach in this market. Our business partners are excited at that prospect," she added.
The deal creates the third-largest personal computing company in the world, with combined annual PC revenue of approximately US$13 billion and volume of approximately 14 million units.
Lenovo claims to have a third of the emerging China PC market and "leading shares" in enterprise PC markets around the world.
“The closing of this transaction is an historic event for Lenovo and marks a new era for the global PC industry,” said Yuanqing Yang, chairman of China-based Lenovo. “The new Lenovo’s strategy is based on what our customers want: high-quality products and world-class service.”
Stephen Ward, chief executive at Lenovo, said the new company would introduce new products within weeks.
Yang has been named chairman of Lenovo, effective immediately, succeeding Liu Chuanzhi, Lenovo's founder, who has been named a non-executive director of the board.
Ward, previously IBM senior vice president and general manager of IBM's Personal Systems Group, was named chief executive officer of Lenovo and appointed to its board of directors, effective immediately.
Lenovo's PCs would be marketed through IBM’s worldwide distribution and sales network. The new Lenovo will be the preferred supplier of PCs to IBM, which will continue to offer a full range of end-to-end integrated IT solutions to its enterprise and SMB customers.
IBM will be the new Lenovo's preferred supplier of services and financing, the companies said.
Lenovo's global headquarters will be in New York, with principal operations in Beijing, China and Raleigh, North Carolina, and sales representation worldwide through its own locations, Lenovo Business Partners, and the alliance with IBM.
Research and development centres are in Beijing, Shenzhen, Xiamen, Chengdu, and Shanghai in China, Tokyo in Japan, and Raleigh in the US.
Lenovo’s primary PC manufacturing and assembly facilities are in Shenzhen, Huiyang, Beijing, and Shanghai in China. It also has mobile handset assembly facilities in Xiamen.
Further manufacturing and distribution facilities are in the US, Mexico, Brazil, Scotland, Hungary, India, Malaysia, Japan, and Australia. Lenovo's PC distribution network includes some 4400 retail outlets in China for the consumer business, the companies said.