Armonk, N.Y.—IBM Corp. announced Tuesday it has agreed to sell its PC business to Lenovo Group, a leading PC marketer in China, for $1.75 billion in cash, equity and debt. IBM will own an 18.9% equity stake in Lenovo.
The deal is expected to be completed in the second quarter of 2005.
The move gives Lenovo global market reach, while strengthening IBM’s focus on its lucrative b-to-b services business.
As part of the agreement, Lenovo and IBM will form an alliance in which IBM is the preferred services and customer financing provider to Lenovo. It will also provide marketing support and demand-generation services for Lenovo products through its sales force of 30,000.
Stephen M. Ward Jr., senior VP-general manager of IBM’s Personal Systems Group, will become CEO of Lenovo following the completion of the transaction. Yuanqing Yang, vice chairman and president-CEO of Lenovo, will become chairman.