Lenovo Seeking Acquisitions in PCs and Phones, CEO Yang Says

Lenovo Group Ltd. (992), the world’s largest maker of personal computers, said it’s looking for acquisitions in PCs and smartphones as expanding share for those products boosted quarterly profit 23 percent.

“We are definitely seeking opportunities in both the PC and phone areas,” Lenovo Chief Executive Officer Yang Yuanqing said in a phone interview today. “The industry is in a period of consolidation, so we definitely should take the opportunity if we can find the right target.”

Lenovo will be more “proactive” on acquisitions, Yang said, declining to name specific targets. Lenovo was in talks to buy part of International Business Machines Corp. (IBM)’s server division until the two sides couldn’t agree on a price, a person familiar with the discussions said in May. BlackBerry Ltd. said it will consider takeover bids after almost a year of advisers unsuccessfully canvassing potential buyers. Yang declined to comment on whether the company would be interested in either IBM or BlackBerry assets.

“Lenovo has come close a couple times already this year to a big acquisition,” Stephen Yang, a Hong Kong-based analyst with Sun Hung Kai Financial Ltd., said in an e-mail today. “We do believe something will happen this year.”

Photographer: Nelson Ching/Bloomberg

Yang Yuanqing, chief executive officer of Lenovo Group Ltd., is weathering the global slump in PC demand by developing mobile devices to lure customers from Apple Inc. Close

Yang Yuanqing, chief executive officer of Lenovo Group Ltd., is weathering the global... Read More

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Photographer: Nelson Ching/Bloomberg

Yang Yuanqing, chief executive officer of Lenovo Group Ltd., is weathering the global slump in PC demand by developing mobile devices to lure customers from Apple Inc.

Lenovo’s Chief Financial Officer Wong Wai Ming said in January the company was assessing potential acquisition targets and strategic alliances, including a deal with BlackBerry. The company, which has headquarters in Beijing and Morrisville, North Carolina, said in March there hadn’t been any specific evaluation of BlackBerry as a target.

“I believe that Lenovo may potentially explore either an acquisition of BlackBerry or form a joint venture with the company,” Jean-Louis Lafayeedney, an analyst at JI Asia in Hong Kong, said in an e-mail today. “BlackBerry holds a significant amount of IP which Lenovo may need as it ramps up sales of smart devices outside of China, and in particular in the developed markets.”

Lenovo’s Yang is weathering the global slump in PC demand by developing mobile devices to lure customers from Apple Inc. (AAPL) and Samsung Electronics Co. Smartphone shipments by Lenovo more than doubled in the three months ended June from a year earlier to a record 11.4 million units, the company said today.

Net income climbed 23 percent to $173.9 million in the three months ended June from $141.4 million a year earlier, Lenovo said in a statement today. That exceeded the $167 million average of 10 analysts’ estimates compiled by Bloomberg.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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