Structure - MNO3313A-Lenovo - home结构- mno3313a联想-首页.doc

Lenovo: Acquisition of IBM’s Personal Computer Division 1 Abstract 2 Introduction 2.1 Company background of Lenovo Lenovo was previously known as Legend Group in Hong Kong in 1988. In 2004, the company changed its name to Lenovo Group. It moved its headquarters from Hong Kong to Purchase, New York in 2005. Lenovo primarily operates in North America and China. After the acquisition with IBM’s Personal Computer Division, it moved its headquarters in Morrisville, North Carolina. Lenovo employs 25,100 people. Lenovo manufactured personal computers (PCs), related IT products, and services. (Refer to Appendix 1) 2.2 Company background of IBM Prior to the deal, IBM’s PCs had made little profit, and was often losing money too. IBM was undergoing a strategic shift from selling commodity-products to selling more services, software and high-end computers. It also made it easier for IBM to sell more services in China. 3 The Change 3.1 Overview Lenovo Group announced in December 2004 the definitive agreement that the group will acquire IBM’s Personal Computing Division. (Refer to Appendix 2) 3.2 Aims of the Change The aim was to bring IBM’s enterprise-class PC technologies to the consumer market and to make Lenovo able to reach the markets outside China and Asia. This would come from IBM’s global brand recognition, an international and diversified customer base, a world-class distribution network with global reach, more diversified product offerings, enhanced operational excellence and leading-edge technology. 3.3 Parties involved in the change During the acquisition of IBM’s PC Division (IBM PCD), parties involved included Lenovo’s management, IBM’s management, US government, and external consultants. 3.4 Management After the acquisition, Yang Yuanqing becomes the Chairman and Stephen Ward becomes the Chief Executive Officer. 3.5 Governments In order to implement the acquisition, approval from the government was needed. Prior to the acquisition, US national security body a