RESEARCH TRIANGLE PARK — A new era begins today for the Big Blue workers who gave the world ThinkPads, cutting-edge PCs and near tools such as the biometric (thumb) sensors to make laptops more secure.
As of today, IBM’s PC division and its 2,000 or so workers in RTP are now part of Lenovo.
Lenovo, which is based in China, and IBM announced Sunday that the companies had closed on the acquisition of IBM’s personal computing division by Lenovo. The deal was announced on Dec. 8 and had to clear a number of regulatory hurdles, including security concerns about Chinese access to sensitive U.S. developed technology.
But the Is have been dotted and the Ts have been crossed on the $1.75 billion deal. IBM not only expects to declare a billion dollar gain on the deal but also cleared itself of $500 million in debt. IBM received $800 million in cash and another $450 worth of Lenovo stock.
Stephen Ward, the exec who ran the PC division for IBM, is now Lenovo’s chief executive officer. And he is promising that innovation and invention will continue to be the calling cards for the company’s PC and laptop development.
“We will increase the pace, not slow down the pace, of innovation and quality around the things that matter to our customers,” Ward told the Reuters news service in an interview.
Ward added in a statement announcing the closing that Lenovo already has big plans.
“Within weeks, we will be introducing new products as the new Lenovo,” he said.
Gartner reports that IBM’s share of the global PC market was 5 percent in 2004 — or 6.8 million units. Dell (16.4 percent) and HP (13.9 percent) had much larger shares. Lenovo, which has been in business since 1984 and is partially owned by the Chinese government, ranked fifth in sales before picking up IBM’s share.
Lenovo said it expected to generate $13 billion in revenue and to sell 14 million computers. The combined company will have its headquarters in New York and total some 19,000 employees.
“We expect to capture synergies starting today through leveraging the complementary nature of Lenovo and (the personal computing division’s) customer bases, product offerings and geographic coverage while utilizing Lenovo’s highly sophisticated operating platforms,” Ward said in a statement.
In announcing the close, Lenovo confirmed $350 million in outside investment from Texas Pacific Group, General Atlantic Group and Newbridge Capital Group.
The holdings of the new Lenovo are certainly international. In addition to its RTP operations, the company will operate research and development centers in Tokyo as well as five cities in China. Primary manufacturing facilities are based in China.