Lenovo Sells Handset Unit for USD 100 mln
Netease Tech, 1/31/08
The Lenovo Group (0992.HK) announced today that it has sold its handset business unit for USD 100 mln to four companies: Jade Ahead (45%), Xiaoxiang Ventures (30%), Ample Growth (15%) and Super Pioneer (10%). Lenovo's 2007 third-quarter report showed that during the quarter, Lenovo's mobile phone business had suffered the effects of intensified market competition, with sales volume for its mobile phones down 31% year-on-year.
Editor's Note: Although Lenovo is selling off its handset unit, it is not completely cutting the cord; both Jade Ahead and Ample Growth are subsidiaries of Hony Capital, in which Lenovo Holdings owns a 34.4% stake. Xiaoxiang and Super Pioneer are wholly owned by businessman Yang Xiangyang.
Of the total USD 100 mln paid for Lenovo Mobile, USD 80 mln will be paid up front, while the remaining USD 20 mln will conditional upon meeting certain performance targets. Lenovo has granted the buyers free use of the Lenovo Mobile brand over the next five years. After that, Lenovo will have the right to negotiate a price for 5 more years' use of the brand, provided Hony Capital still owns a majority share in Lenovo Mobile at that time.
Keywords: divest M&A Jade Ahead Xiaoxiang Ventures Ample Growth Super Pioneer Q3 2007 fiscal report Lenovo Holdings Yang Xiangyang 0992.HK Hony Capital Lenovo Lenovo Mobile mobile phone sales volume wireless
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