Lenovo and NEC partner to become Japan's largest PC group

By on January 27, 2011, 10:14 AM
As expected, Lenovo and NEC have announced a joint venture that forms NEC Lenovo Japan Group, the largest PC group in the country. The duo will be able to grow their commercial and consumer PC businesses in Japan, the third largest PC market in the world, through a stronger market position, enhanced product portfolios, and expanded distribution channels.

Under the terms of the agreement, Lenovo will hold a 51 percent stake in the new joint venture, while NEC will hold a 49 percent stake. Hideyo Takasu, currently President of NEC Personal Products, will become President and CEO of the new joint venture, while Roderick Lappin, currently Representative Director and President of Lenovo Japan, will become Executive Chairman. As the result of this transaction and upon closing, which will happen by June 30, 2011, Lenovo will pay $175 million to NEC through an issue of Lenovo shares.

NEC has long been the leading PC company in Japan with widespread sales, marketing, and distribution capabilities. Lenovo, the fourth-largest PC maker in the world, currently has a major research center, known as the Yamato Lab, in Yokohama, Japan, and a main sales office in Tokyo. The new strategic relationship combines NEC's market reputation, product development capabilities, well-regarded customer service, and knowledge of customer needs in Japan with Lenovo's heritage of technology expertise, strong global business momentum, and global supply chain reach.

For Japanese customers, Lenovo and NEC say the deal will result in more innovative products that are faster to market, more attuned to their needs, and competitively priced. The companies have also agreed to discuss further cooperation in other areas, including selling PCs and providing global support to Japanese companies operating outside of Japan, as well as developing, producing, and selling devices such as tablets, and even selling additional IT platform products such as servers.

"The agreement with NEC is a perfect fit for our strategy. It reinforces our commitment to our core PC business while, at the same time, providing important new opportunities for growth in Japan," Yang Yuanqing, CEO of Lenovo, said in a statement. "We have a long history of innovation in Japan and a firm commitment to the Japanese market. Now, we are combining our global strength and momentum with NEC's market leadership. It is the perfect partnership for us and for our customers."

"Lenovo is the right partner at the right time for NEC, and we believe that we are creating a strategic relationship today that will benefit NEC and our customers for many years to come, Nobuhiro Endo, President of NEC, said in a statement. "We believe this alliance will further reinforce and expand our PC business in Japan, upholding the NEC brand name and will continue to provide Japanese PC users with products supported by high quality and service. Taking this strategic relationship as a first step, NEC will accelerate expansion of our IT business worldwide."


Add New Comment

TechSpot Members
Login or sign up for free,
it takes about 30 seconds.
You may also...
Get complete access to the TechSpot community. Join thousands of technology enthusiasts that contribute and share knowledge in our forum. Get a private inbox, upload your own photo gallery and more.