Lenovo's Acquisition of Ibm
Table of Contents
1. Introduction 2
2. The Parties Involved 2
2.1 The Acquirer: Lenovo 2
2.2 The Target: IBM 2
3. The Acquisition 2
3.1 Development of Acquisition (Time Line) 2
3.2 Facts of Acquisition 2
3.3 Expected Problems from Acquisition 2
3.4 Underlying motivations/expectations for Lenovo’s Management 2
3.5 Underlying motivations/ expectations for IBM’s Management 2
4. Were Lenovo’s expectations met? 2
4.1 To become an international company with access to the global PC market 2
4.2 Aim to leverage IBM brand to gain marketplace traction 2
4.3 To leverage on acquired IBM’s management expertise 2
4.4 To achieve more cost-savings by tapping on IBM’s efficient supply-chain, sales and distribution network 2
4.5 Overall Assessment on whether Lenovo’s expectations were met 2
5. Were IBM’s expectations met? 2
5.1 To concentrate on IBM’s core products through the removal of the PC unit 2
5.2 To build its brand name in the booming Asian Market 2
5.3 Overall Assessment of whether IBM’s expectations were met 2
6. Comparison study: Hewlett-Packard Company (HP) and Compaq Computer Corporation (Compaq) Merger 2
6.1 Analysis of the success of Lenovo IBM merger vs. failure of HP-Compaq merger 2
7. Conclusion 2
8. Going Forward 2
9. Bibliography 2
1. Introduction
On 1st May 2005, Lenovo acquired IBM’s Personal computing unit (IBM PC) for $1.75 billion. This was seen as a major milestone for Lenovo in its efforts to globalize its operations according to industry analysts. With this acquisition, the goal of its ambitious founder, Liu Chuanzhi, to create a global PC manufacturing powerhouse was achieved. This paper seeks to evaluate the success of the acquisition by focusing on whether the underlying motivations for both Lenovo’s and IBM’s management for entering the acquisition were met. While there were many risks involved, the rationale for the acquisition was sound, with the major players all positioned to benefit: Lenovo increased
1. Introduction 2
2. The Parties Involved 2
2.1 The Acquirer: Lenovo 2
2.2 The Target: IBM 2
3. The Acquisition 2
3.1 Development of Acquisition (Time Line) 2
3.2 Facts of Acquisition 2
3.3 Expected Problems from Acquisition 2
3.4 Underlying motivations/expectations for Lenovo’s Management 2
3.5 Underlying motivations/ expectations for IBM’s Management 2
4. Were Lenovo’s expectations met? 2
4.1 To become an international company with access to the global PC market 2
4.2 Aim to leverage IBM brand to gain marketplace traction 2
4.3 To leverage on acquired IBM’s management expertise 2
4.4 To achieve more cost-savings by tapping on IBM’s efficient supply-chain, sales and distribution network 2
4.5 Overall Assessment on whether Lenovo’s expectations were met 2
5. Were IBM’s expectations met? 2
5.1 To concentrate on IBM’s core products through the removal of the PC unit 2
5.2 To build its brand name in the booming Asian Market 2
5.3 Overall Assessment of whether IBM’s expectations were met 2
6. Comparison study: Hewlett-Packard Company (HP) and Compaq Computer Corporation (Compaq) Merger 2
6.1 Analysis of the success of Lenovo IBM merger vs. failure of HP-Compaq merger 2
7. Conclusion 2
8. Going Forward 2
9. Bibliography 2
1. Introduction
On 1st May 2005, Lenovo acquired IBM’s Personal computing unit (IBM PC) for $1.75 billion. This was seen as a major milestone for Lenovo in its efforts to globalize its operations according to industry analysts. With this acquisition, the goal of its ambitious founder, Liu Chuanzhi, to create a global PC manufacturing powerhouse was achieved. This paper seeks to evaluate the success of the acquisition by focusing on whether the underlying motivations for both Lenovo’s and IBM’s management for entering the acquisition were met. While there were many risks involved, the rationale for the acquisition was sound, with the major players all positioned to benefit: Lenovo increased
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