China's largest manufacturer of personal computers, Lenovo Group, has bought IBM's PC business for $1.25 billion, making it the world's number three in the sector.
The deal comprises $650m in cash and $600m in Lenovo shares, which gives IBM an 18.9% stake in the Hong Kong-listed company.
Lenovo will fund the acquisition through internal cash and debt and will assume about $500m of debt from IBM, making the deal worth some $1.75 billion in all.
The deal will allow Lenovo to use IBM's famous 'Think' brand. The company will also have the right for five years to use the IBM name.
'This will make Lenovo the third largest computer company in the world with annual revenues of over $10 billion,' said Lenovo chairman Liu Chuanzhi.
IBM currently holds third place in the global PC market with 5.6%, behind market leader Dell's 17% and Hewlett-Packard's 15%. Before the deal Lenovo held 2% of the global market and was the world's eighth largest PC maker.
IBM employs over 4,000 people in several operations around the country - in manufacturing, eProcurement, sales and marketing, software development, consultancy, services and customer support and treasury operations.
'This is a long term strategic alliance by IBM that will strengthen our offerings in the PC market in Ireland,' commented Peter O'Neill, Sales and Distribution, IBM Ireland.
'In the short to medium term this means no change to our product line or availability, no change in our customers services teams or sales coverage. In the long term, it will deliver continued high levels of innovation, more product choice to the Irish consumer, innovative financing options and the best customer service available', he added.
The new concern will be headquartered in New York with operation centres in Beijing and Raleigh in the US. It will have a workforce of 19,000 people, with approximately half coming from each side. Among the almost 10,000 IBM people, close to 40% are already employed in China.
IBM, the world's largest diversified computer and technology service company, reportedly wants to concentrate instead on its more profitable operations. The PC business represents about 12% of its annual revenues of $92 billion.
