Legit Reviews

By THE ASSOCIATED PRESS


BEIJING, May 1 (AP) - The Chinese computer maker Lenovo said Sunday that it had completed its $1.75 billion purchase of I.B.M.'s personal computer division, creating the world's third-largest PC maker.

The deal, one of the biggest foreign acquisitions ever by a Chinese company, is expected to quadruple the sales of the Lenovo Group, already Asia's biggest computer maker.

"Within weeks, we will be introducing new products as the new Lenovo," Stephen Ward, Lenovo's chief executive officer, said in a company statement, providing no specifics.

The company also confirmed weeks of speculation that it was raising extra cash for the deal. It said three private equity investment firms - Texas Pacific Group, General Atlantic Group and Newbridge Capital Group - had agreed to take a $350 million stake in the company. A shareholder's meeting related to that investment is scheduled for May 13, it said.

Lenovo's shares are traded in Hong Kong, but the company has not announced any plans for other share listings overseas, raising expectations that it would find other ways to raise funds through overseas investors.

The United States Committee on Foreign Investment had convened to investigate any national security implications of the proposed acquisition after three members of Congress raised questions about the sale, but a review cleared it in March.

Lenovo is partly owned by the Chinese government.

Lenovo was founded in 1984 by academics at the government-backed Chinese Academy of Sciences working out of a small cottage. First set up to distribute equipment made by I.B.M. and other companies, by 1990 it was selling PC's under its own brand name.

I.B.M. now focuses on consulting and software, outsourcing much of its manufacturing. The sale to Lenovo is expected to cut production costs and breathe new life into the PC business, which now accounts for a small portion of I.B.M.'s total sales and profits.

I.B.M. had 5 percent of the worldwide PC market in 2004, selling 6.8 million units, according to Gartner Inc., a technology consulting firm. That compares with 16.4 percent for Dell and 13.9 percent for Hewlett-Packard, which makes the HP and Compaq brands. Lenovo ranked fifth in sales worldwide.