Lenovo wants to grow its commercial and consumer PC business in Japan which it reckons is the third largest PC market in the world, and it thinks, probably rightly, signing on the dotted line with NEC will go some way to help.
NEC will, for its part, likely to benfit from Lenovo's global supply chain.
On closing, NEC will receive US $175 million through an issue of shares from Lenovo .
The two firms will establish the NEC Lenovo Japan Group, as well as a further organisation under the named Lenovo NEC Holdings B.V.
As part of the agreement, Lenovo and NEC will hold a 51 percent and 49 percent stake respectively, with Hideyo Takasu, president of NEC Personal Products, becoming President and CEO of the new joint venture. Meanwhile Lenovo’s Roderick Lappin, currently Representative Director and President of Lenovo, will become Executive Chairman.
Lenovo (Japan) and NEC Personal Computers - a half-new company formed as a result of separating NEC’s PC business from NEC Personal Products - will both become 100 percent subsidiary companies of the venture.
Lenovo, on the brink as fourth-largest PC outlet in the world, already has a major research centre, known as the Yamato Lab, in Yokohama, Japan, and a main sales office in Tokyo.
Combined operations in Japan are ready to start immediately, with the transaction expected to close by June 30, 2011.