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China's Lenovo Vows To Cooperate With US Panel On IBM Sale Review
Beijing (AFP) Jan 25, 2005 China's largest personal computer-maker Lenovo Group vowed Tuesday to fully cooperate with a US government panel reviewing its acquisition of IBM's PC business. The 1.25 billion dollar deal is being probed by the Committee on Foreign Investments in the United States (CFIUS), an interagency panel that may review mergers or acquisitions that affect US national security. "We will cooperate with the US government positively," said Lenovo spokesman Guo Tongyan, who insisted the takeover, which would make Lenovo the world's number three in the intensely competitive PC field, was going ahead smoothly. "The acquisition is making progress successfully," he said. IBM has also said it will cooperate with the review. "IBM has filed the required legal notice with the Committee on Foreign Investments," said IBM spokesman Edward Barbini in a statement Monday. "IBM is following all the normal and routine procedures in the review of this transaction." Conita Hung, head of research at Hong Kong-based Delta Asia Financial Group, said the news could actually be positive for the company as she said the market does not see both companies as a strategic fit. "I think the news could be positive because IBM's PC business is a loss-making business. Although it might help Lenovo to expand its business overseas, it would take them a long time to create synergies given the big difference between the two cultures and management philosophies," she said. "It will take them three years to see synergies and that's too long," she said. Hung said although the deal has pushed Lenovo shares up by 10 percent, investors have recently taken profits as they realised the deal might not be as positive as first expected. "It's not easy to find a suitable partner and there's no need to force this. I've never recommended investors to buy Lenovo beceause of the deal," she added. The deal, signed in December, comprises 650 million dollars in cash and 600 million in Lenovo shares which gives the US-based IBM a 18.9 percent stake in the Hong Kong-listed Lenovo. It will allow Lenovo to use IBM's famous 'Think' brand. The company will also have the right for five years to use the IBM name, boosting its presence in a business dominated by giant US manufacturers. Lenovo, listed in Hong Kong, will fund the acquisition through internal cash and debt. Its share price dropped 0.025 cents or 1.15 percent to close at 2.15 Hong Kong dollars Tuesday while the overall market rose 1.47 percent. Community Email This Article Comment On This Article Related Links CFIUS Lenovo SpaceDaily Search SpaceDaily Subscribe To SpaceDaily Express The Chinese Space Program - News, Policy and Technology China News from SinoDaily.com
Taikonauts On Moon A Far Off Dream For China Yet
Beijing (XNA) Jan 05, 2006A one-year lunar fly-by mission may start in April 2007 in China, but a manned flight to the Earth's neighbour may be a long way away, a chief lunar exploration scientist said last night. |
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