[photopress:pcLenovo.jpg,full,alignright]Chairman Yang Yuanqing of Lenovo said the company is seeking acquisitions to regain the world’s third-largest personal- computer seller ranking lost to Acer last year.
In an interview with Bloomberg Television broadcast Yang Yuanqing said, ‘We are not satisfied with our current market share and global ranking. I believe there will be further consolidation in the industry and we hope to seize the opportunity to buy.’
Lenovo, the Chinese company that shot to prominence with the 2005 purchase of IBM’s PC unit, had its European expansion plans foiled last year when Acer bought Packard Bell.
Joseph Ho, a Daiwa Institute of Research analyst said, ‘It makes sense for Lenovo to want to acquire as it has the financial muscle. He rates Lenovo ‘outperform.’ But asks: ‘The question is what to acquire and at what price.’
Lenovo had cash and equivalents of $2.2 billion as of Dec. 31, according to the latest information from the company, which gets more than half of its sales from Asia.
The $1.25 billion purchase of the IBM business three years ago made the company the world’s third-largest computer maker.
Lenovo, which moved its headquarters to Raleigh, North Carolina, after the acquisition, lost the position to Acer in the second half of 2007, after the Taipei-based rival bought Packard Bell.
There are simply not that many possibilities around.
Lenovo’s current market value is $7.5 billion, about 6% of the size of industry leader Hewlett- Packard. Acer is valued at $5.4 billion.
Charles Guo, a Hong Kong-based analyst at JPMorgan suggested that for companies seeking to grab a larger share of the Chinese market, domestic PC makers such as Founder Technology and Tsinghua Tongfang may be takeover targets, said .
He said, ‘Acquiring Chinese players like Founder and Tongfang will give greater access to the market.’
Chairman Yang Yuanqing made the most remarkable statement when he said, ‘The most important thing is growing our market share, more than making money.’
Source: Bloomberg
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