Chinese personal computer maker Lenovo Group Ltd. (LNVGY, LNVGF) said Wednesday that it has agreed to acquire CCE, a group of three Brazilian consumer electronics makers, for about 300 million Brazilian Reais or $147 million in cash and stock.
The company noted that the deal enables it to significantly expand its presence in Brazil, the world's third-largest PC market.
Through the deal, Lenovo will acquire Digibras Industria do Brasil S.A., Digiboard Electronica da Amazonia LTDA, and Dual Mix Comerico de Electronicos LTDA.
CCE is a leading domestic maker of personal computers and consumer electronics in Brazil. Together with its affiliates, the company is the largest employer in personal computing and consumer electronics in the North Region of Brazil.
Lenovo, the world's second-largest PC vendor, noted that the acquisition will significantly expand its presence in Brazil, with a manufacturing presence and a full range of consumer products across all four screens - PC, tablet, smartphone and television- that define the new "PC+ era".
Lenovo is looking to maintain growth even as the traditional PC market struggles to stage a recovery amid the economic slowdown. The acquisition will enable Lenovo to enter the tablet, smartphone and television market in Brazil.
Lenovo will retain CCE's management team including its founder and CEO, Roberto Sverner, in the combined company. The company expects the acquisition to close in the first quarter of 2013.
Lenovo further said that its present business plan does not anticipate any workforce reductions as a result of the acquisition.
The two companies do not expect their existing related operations to be interrupted during and after the transition from independent operations to the deal close. The companies said that the current product brand names of CCE and Lenovo will continue, while leveraging each other's strengths.
Lenovo's present business plan does not anticipate any workforce restructurings as a result of the acquisition.
Yuanqing Yang, chairman and CEO of Lenovo Group said, "This move more than doubles our PC market share in Brazil, one of the world's fastest-growing and most important technology markets. It not only helps Lenovo rapidly expand its leadership here, but it also lays a foundation for our future PC+ vision."
Roberto Sverner, founder and CEO of CCE said, "The combination of CCE and Lenovo is good for the Brazilian economy: it will spur job creation, improve the competitiveness of the CCE product range and enhance the Brazilian operations of a major global company, at a time when we are preparing to showcase Brazil during the World Cup and 2016 Olympics."
During the recent first quarter, Lenovo's worldwide PC shipments rose 24.4 percent, while overall industry shipments declined about 2 percent. Lenovo's consolidated sales in the Asia Pacific/Latin America region during the quarter was $1.7 billion, or 21 percent of its worldwide sales. PC shipments surged 59.2 percent in the region amid strong growth in Japan, India and Brazil.
Lenovo has said it will continue to focus on executing its "protect and attack" strategy of reinforcing its business in established markets while going after potential new markets as the industry shifts to include more tablets, Smart TVs and smartphones in the product mix.
LNVGY closed Wednesday's trading at $15.88, down $0.85 or 5.08 percent on a volume of 27,099 shares.
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