Lenovo buys Brazilian electronics firm CCE to double market share

City A.M. Reporter
CHINA’S Lenovo Group agreed yesterday to buy Brazilian consumer electronics maker CCE, as the world’s second-largest PC maker by sales looks toward Brazil’s promising consumer market to boost profit growth, which has been slowing.

The deal, announced in a securities filing and valued at a base price of 300m reais (£93m), will help Lenovo nearly double its share of the PC market in the world’s sixth-largest economy.

The acquisition came after shares in Lenovo dropped as much as 8.1 per cent after Japan’s cash-strapped NEC Corp sold its entire stake in the company in a deal worth ¥18bn (£144.37m).

The fall in the stock took Lenovo shares below HK$6.30, the lower end of the range at which the deal was priced, suggesting investors were expecting further weakness in the stock.

A Lenovo executive said that the stake sale would not impact a PC and tablet business venture the two formed last January to focus on the Japanese market.

“In reality, NEC could sell those shares after two years anyway as per contract. All we have done is to let them do it 10 months earlier. This has no bearing on our joint venture,” said Roderick Lappin, vice president of Lenovo Group.