Lenovo Computes Back to Profits, Takes Over Fujitsu's PC Business

Lenovo Computes Back to Profits, Takes Over Fujitsu's PC Business

Japan's Fujitsu said on Thursday it had agreed to merge its struggling PC business with Lenovo, giving the Chinese computer giant a controlling share of the business. The merger also includes the Development Bank of Japan.

Lenovo will take a 51 percent stake in the PC business that the Japanese electronics maker spun off a year ago, while the state-owned Development Bank of Japan will take 5 percent.

When it comes to payment, Lenovo said it would pay Fujitsu $156.7 million (17.8bn yen) in cash, and another $22 to $112 million by 2020, based on performance.

Fujitsu of course had already spun off its PC unit back in February 2016 and at one stage there was talk of Japanese system makers Toshiba, Fujitsu and Vaio forming their own joint venture that would combine their respective PC units into a single business. DBJ plans to contribute 2.5 billion yen.

Lenovo shares increased by nearly 3% in early Thursday trading in London, outpacing the broader market that was off by 0.2%.

The deal is expected to close in Q1 2018, and the resulting three-company venture will keep trading under the Fujitsu brand.

Revenue at Lenovo reached $11.8 billion in comparison to a year ago at the same time of $11.2 billion.

A gain in taxation of more than $118 million helped Lenovo earnings to beat analyst estimates of $44 million.

Most PC makers have struggled the past four to five years as the shift to smaller, mobile electronic devices has caused the PC market to plummet.

Lenovo's global PC unit shipments rebounded 17 percent from the previous quarter, though its PC market share in the six months dropped 0.2 percentage point to 21 percent, Lenovo said, without revealing shipment numbers.

Tablet shipments increased by 8.9 percent year-over-year to 2.97 million units.

Lenovo's business has grown 14 percent year-over-year in emerging markets, including India. However, it said that the agreement it signed with Fujitsu would make a positive impact to its worldwide business. "The combination of strong execution and building solid foundations continue to be Lenovo's strength. We will continue to invest in building foundation and core competence for the two new growth engines, which will bring stable and sustainable returns".



Latest news

Channing Tatum opens Jimmy Kimmel Live with stellar dance routine
Adorably, the three-year-old seemed pretty calm about the whole thing... until she realized mom ate the Swedish Fish. Upon hearing the news, Everly quickly went to her mother Jenna Dewan Tatum and hugged her legs in disappointment.

Teva Pharmaceutical Industries Limited (TEVA)- Stocks Defying Gravity
Finally, GAM Holding AG boosted its stake in shares of Teva Pharmaceutical Industries Limited by 23.2% in the second quarter. The 12-month average price target assigned to the stock is $21.12, which implies an upside of 56% from current levels.

U.S. 'to charge six Russian officials' over election hack
Reaction to Hillary Clinton and the DNC's involvement in the anti-Trump dossier on 'Journal Editorial Report '. Mueller's team has brought charges so far against three members of Mr.

Hurricanes hit insurer RSA's Q3 underwriting performance
That came after its disclosure last month that it was facing a $3.6bn hit from the series of catastrophes in the third quarter. Earnings per share year-to-date (YTD) ahead of 2016; however, held back by third quarter 2017 underwriting results.

Pakistani sisters released from Amritsar jail after a decade
Lawyer Navjot Kaur Chabha, who had been working on the case since October 2016, said she was happy her struggle didn't go in vain. The sisters have requested to visit the Golden Temple before they are handed over to Pakistan via the Attari border today.

Other news