Private Chinese firm pays $404 million for major stake in Lenovo parent
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Local Tech Wire
MORRISVILLE, N.C. – The Chinese Academy of Sciences is selling 29 percent of its share in Legend Holdings, the parent company of Lenovo, to a Chinese firm in a deal worth $404 million.
Lenovo, the world’s No. 4 PC maker which bases its global headquarters in Morrisville but has most of its operations in China, confirmed the deal to Reuters and the IDG news service.
According to Lenovo’s web site investor information, Legend Holdings owns 42 percent of Lenovo’s stock. Public shareholders own 50.4 percent.
U.S. investors TPG Capital, General Atlantic LLC and Newbridge Capital LLC own a collective 6.6 percent and Lenovo’s directors to remaining 0.7 percent.
Its total market cap as of July 31 was $4.3 billion.
Legend Holdings was founded in China 25 years ago. The Chinese Academy of Sciences is part of the Chinese government and is focused largely on research and development. The Academy would still remain Lenovo’s majority owner with 36 percent of its shares.
Lenovo shares are traded on the Hong Kong stock exchange. However, the company is interested in listing its shares on the Shanghai exchange as well if rules are changed permitting firms with foreign ownership to be listed.
China Oceanwide Holdings agreed to pay the asking price and met other conditions set by the academy, Lenovo said. An Oceanwide spokesperson also confirmed the deal to Reuters.
Oceanwide operates a variety of private sector companies in real estate, banking and energy.
A formal announcement is expected next week.
Copyright 2010 Local Tech Wire. All rights reserved.
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