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December 12, 2008

Lenovo eyes PC rivals to spur growth

Fujitsu-Siemens? Positivo? A N Other?

By Jason Stamper

Market speculation that Lenovo is about to dip into its $1.5 billion cash pile to acquire a rival PC manufacturer has put the Fujitsu-Siemens PC business and top Brazilian PC supplier Positivo Informatica in the frame as possible takeover targets.

Reports in the business press over the past couple of days suggest that Positivo is a more valuable acquisition for an Asian company like Lenovo, than a US rival like Dell, which has also been linked with the South American manufacturer.

Other reports have coupled the suggestion that Fujitsu is looking to sell off its retail PC operations in Europe, to a supposed level of interest from Lenovo.

Either way, Beijing-based Lenovo has made it abundantly clear that it needs to reduce its over-reliance on corporate IT budgets. These are being squeezed in the current downturn, and according to IDC PC shipments worldwide are expected to grow by only 3.8% next year.

Lenovo has also stated that it will continue to focus on emerging markets for growth. The Chinese company saw its sales increase 180% in Russia and 100% in India this year.

The acquisition of the Fujitsu arm would accelerate Lenovo’s business plans in Western Europe, while the more likely Positivo takeover would provide it with a standing start in the relatively untapped South American regions.

China is currently Lenovo’s major market, and business there is responsible for over 40% of the company’s total sales, which overall were up 10% to $4.2 billion this year.

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Lenovo is said to be the world’s fourth largest PC supplier, having boosted its standing when it acquired IBM’s PC unit for $1.75bn in 2005.

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