Chinese Computer Maker to Buy IBM PC Division
STEVE INSKEEP, host:
On Monday's, the business report focuses on technology.
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INSKEEP: A company once synonymous with American technological brilliance is selling part of its business to China. IBM completed a deal to dispose of its personal computer division. The plan was announced last year but had to overcome the resistance of federal regulators.
RENEE MONTAGNE, host:
China's Lenovo Group is paying $1.25 billion. It's one of the biggest acquisitions ever by a Chinese company, and it would create the world's third largest PC maker. Simon Yates, an analyst with Forrester Research, thinks the deal makes sense.
Mr. SIMON YATES (Analyst, Forrester Research): For both companies, if they can pull it off, it offers tremendous growth opportunities.
MONTAGNE: Many of those growth opportunities will come in the Asia Pacific market because many homes there aren't yet equipped with PCs. Yates thinks IBM and Lenovo complement each other.
Mr. YATES: These two companies have very little overlap. Lenovo is primarily a desktop player that does 90 percent of its sales in China--would like to start being able to expand into other parts of Asia Pacific. And for IBM, this really gives them an inroad into the Chinese market that is growing very rapidly.
INSKEEP: That's analyst Simon Yates, who also predicts that in two years Lenovo will be a significant player in the US consumer PC market.
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