Highlights from the last week of China business news: Lenovo is badly outmaneuvered by rival Acer; German Chancellor Angela Merkel beats the human rights drum on a visit to China.
China’s Lenovo has found itself seemingly outmaneuvered by Taiwanese rival Acer in a global game strategic acquisitions. The news came this week that Acer succeeded in its US$710 million acquisition bid for American PC maker Gateway, catapulting it past Lenovo as the world’s third-largest computer maker. Not only does Acer now command 8.8% of the global market to Lenovo’s 7.9%, it can also now block a deal Lenovo had been working on. Lenovo has said it wants to buy Packard Bell, the No. 4 computer maker in Europe, to help its position in the desktop market there.
But Packard Bell has an agreement that gives Gateway the right of first refusal over any sale (we’re simplifying it a little – there’s an excellent full explanation here). Gateway plans to exercise its right and snatch Packard Bell from Lenovo – a close call, because Lenovo had already signed a memorandum of understanding with Packard Bell earlier this month. Lenovo probably won’t get Packard Bell now, although it bravely said it remains "hopeful." Briefly, there was a rumor that a Chinese buyer (Lenovo, perhaps?) was in the market for US disk drive maker Seagate. But Seagate’s chief executive dismissed the speculation, saying that there is no Chinese buyer. It was just a misunderstanding amplified by the New York Times.
Merkel crystal clear on human rights
German Chancellor Angela Merkel is pushing some hot buttons on her visit to China. Before she came she warned that she would push Beijing to fight the "appalling" human rights situation in Sudan. True to her word, she raised human rights issues with President Hu Jintao and Premier Wen Jiabao when they met on August 28. But she took things a step further, meeting privately with outspoken critics of the government like Li Datong, former editor of the China Youth Daily‘s Freezing Point supplement, who was removed from his post after he criticized a newspaper censorship system last year.
Merkel also gave a speech at the Chinese Academy of Social Sciences in Beijing that sounded a warning shot for Beijing’s Olumpics publicity campaign. "The world will watch China in a way not seen in many years," she said. Nevertheless, she found common ground with her Chinese counterparts on some issues, agreeing to create two environmental working groups, for example. And Wen pledged to stop those alleged PLA hackers from breaking into German computers again.
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