Lenovo Group "renews" NEC joint venture Company

Announcing the completion of all relevant regulatory requirements for the acquisition of IBM's x86 server business, Lenovo Group (00992.HK) made another choice for a merger more than 3 years since October 1, when it became the third largest manufacturer of x86 servers worldwide.

Lenovo Group and NEC agreed to extend the company's period of more than 5 years, based on its robust business relationship with NEC and the business development needs of both sides, Lenovo announced October 7.

To reflect this intention, the Contracting Parties made a number of amendments to the Agreement on October 7 to amend the Business Merger agreement, the shareholder agreement and a number of agreements to monitor existing continuing transactions.

Among them, the contractor of the NEC brand Licensing agreement concluded the NEC Brand Licensing Revision agreement on October 7 to extend the NEC brand licensing agreement for a period of two years to June 30, 2018.

On January 27, 2011, Lenovo Group announced a joint venture agreement with NEC to set up a joint venture PC company.

Public information shows that 51% of the joint venture company is owned by LENOVOBV and 49% by NEC. Under the Business Consolidation agreement, LENOVOBV granted a call option to NEC to require LENOVOBV to purchase all NEC Joint stock shares from NEC, and NEC granted a subscription option to the LENOVOBV to require NEC to sell all common shares of NEC Joint venture company. LENOVOBV the maximum price payable under the original call option or the original subscription option will be USD 275 million.

NEC was Japan's largest PC company, but it was difficult to compete in the global market because of its smaller overall size. Lenovo's CEO, Yang, said in a media interview that the acquisition of NEC, Lenovo PC will return to the world's top three.

However, Lenovo has become the world's largest PC vendor, according to IDC and Gartner's second-quarter industry figures for 2013. The report shows Lenovo's global market share of 16.7%, higher than the previous world's top hp.

In the Asia-Pacific region, the overall PC market in the fourth quarter improved slightly, down 1.5% per cent year-on-year, while Lenovo's PC sales in the region grew by 14%, according to Lenovo's previous fourth-quarter results.

"Apple currently accounts for about 16% of the market and Lenovo has a market share of about 12% per cent," he said. Yang previously told the first financial daily reporter.

It is noteworthy that after spending 2.9 billion of dollars to acquire Motorola Mobile, Lenovo has invested heavily in the mobile internet sector.

Earlier this year, Lenovo announced a 100 million-dollar purchase of a series of patent portfolios, including 3G and LTE mobile patents and other important mobile patents, owned by Unwiredplanet, a patent-authorised company. At the same time, Lenovo will receive a multi-year mandate for the Unwiredplanet intellectual property portfolio, covering a wide range of areas such as mobile Equipment standard basic patents, installation patents and application-level technology.