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Deal could help China's largest PC maker to close the gap with rivals

The Chinese computer maker Lenovo Group said on Thursday that it will invest $175 million to form a venture with NEC Corp, as part of its effort to expand outside China.

The deal, if successful, is expected to help Lenovo close the gap with rivals such as Hewlett-Packard Co, Dell Inc and Acer Inc in the global PC market.

Lenovo, the world's fourth-largest PC maker said that it will give NEC 281.1 million new Lenovo shares, valued at HK$4.85 (62 cents) apiece, to buy a 51 percent stake in the venture.

Both companies will transfer their Japan PC assets to the venture, named Lenovo NEC Holdings BV, and NEC will own a 49 percent stake, according to the statement.

The partnership with Japan's biggest computer maker paves the way for Lenovo to expand in Japan, which is the world's third-largest PC market after the United States and China. Lenovo said on Thursday that it will take a 26 percent share in the Japanese market after the deal.

"The agreement with NEC is a perfect fit for our strategy," said Yang Yuanqing, chief executive officer of Lenovo. He said the two companies may also establish cooperation in other fields, such as cell phones and the server market, in the future.

Questions:

1. How does Lenovo rank in sales among the world’s PC makers?

2. What would the proposed new venture be called?

3. How much will Lenovo invest to form the venture with NEC?

Answers:

1. Lenovo ranks fourth.

2. The new ventures, after both companies transfer their Japan PC assets, will be named Lenovo NEC Holdings BV.

3. Lenovo plans to invest $175 million to form the venture.

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（中國日報網英語點津 Helen 編輯）

About the broadcaster:

Renee Haines is an editor and broadcaster at China Daily. Renee has more than 15 years of experience as a newspaper editor, radio station anchor and news director, news-wire service reporter and bureau chief, magazine writer, book editor and website consultant. She came to China from the United States.