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Lenovo parent puts significant share of ownership up for sale

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MORRISVILLE, N.C. — Lenovo’s majority owner, the Chinese Academy of Sciences, is looking to sell a significant share of its holdings for just over $400 million.

Lenovo management would have to remain in place as part of the deal, according to the Financial Times.

The world’s fourth-largest PC maker is based in Morrisville, but most of its operations are in China. It operates a second headquarters in Beijing, and its shares are listed on the Hong Kong stock exchange.

CAS, which is supported by China's government, owns 65 percent of Legend Holdings, which is Lenovo’s parent. Legend in turn holds more than 40 percent of Lenovo stock, according to the Financial Times.

A Legend spokeswoman told Reuters that the sale is intended to provide more resources and improve management.

“[The sale] is meant to improve the corporate governance structure of Legend Holdings and to introduce more resources from new investors,” Reuters quoted the spokeswoman as saying.

“[T]he planned share sale is in line with the academy's push to make its subsidiaries more market-oriented,” Reuters added.

The Financial Times noted that CAS has imposed several restrictions on investors, including some $580 million in registered capital. They also must have been in business for at least 20 years and have experience in multiple business sectors.

“The successful bidder will have to hold the shares for five years and promise not to change Legend’s management team and development strategies during that period,” the Financial Times added.

Lenovo has lost money over each of the last three quarters but did report much-improved financials last week, including an upsurge of sales in China.

Lenovo was launched in 1984 as a spin-off from CAS. It acquired IBM’s personal computing business in 2005 and established its international headquarters in Morrisville. Most of IBM’s PC operations had been based in the Triangle.

IBM initially was a significant shareholder in Lenovo but over time has substantially reduced its holdings.

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