Lenovo seals IBM PC deal for US$1.7bn

The widely anticipated buy-up of IBM's PC division by Lenovo, China's leading computer maker, was finally sealed with a handshake in Beijing. The US$1.7bn deal gives IBM US$650m in cash, along with an 18.9% stake in Lenovo worth US$600m. Lenovo is also taking on around US$500m in debt. The combined operation will be the world's third largest PC vendor with sales of about US$12bn a year and 19,000 employees. One of the first changes for Lenovo will be the relocation of its PC headquarters from Beijing to New York. The company will be allowed to use the IBM brand, valued as the world's third most valuable by BusinessWeek/Interbrand, for five years. The branding deal, which covers PC products, also gives Lenovo the use of IBM's "Think" trademark.