Lenovo Group has announced the acquisition of CCE, which is a leader in PCs and consumer electronics in Brazil. The acquisition is expected to expand Lenovo's presence in the world's third-largest PC market, with a manufacturing presence and a full suite of consumer products across all four screens - PC, tablet, smartphone and TV - that define the new "PC+ era," said the China-based vendor.
"This move more than doubles our PC market share in Brazil, one of the world's fastest-growing and most important technology markets. It not only helps Lenovo rapidly expand its leadership here, but it also lays a foundation for our future PC+ vision," said Yuanqing Yang, chairman and CEO, Lenovo Group. "CCE is an excellent fit with its four screen product portfolio and a valuable manufacturing base in Brazil. CCE's management, who will become an essential part of our Brazilian operations, know the Brazilian consumer and will immediately help us establish a strong retail presence. We are confident the acquisition will drive growth; provide a bright future for our teams in Brazil; and bring an exciting, high quality array of products to market."
"CCE's understanding of Brazil and Lenovo's global scale and innovation engine are a potent combination," said Roberto Sverner, founder and CEO of CCE. "Lenovo brings CCE an unmatched legacy of quality, world leading global innovation expertise, retail network development know-how and tremendous supply chain leverage. Their proven track record to managing complex cross-cultural relationships makes us excited about working together. The combination of CCE and Lenovo is good for the Brazilian economy: it will spur job creation, improve the competitiveness of the CCE product range and enhance the Brazilian operations of a major global company, at a time when we are preparing to showcase Brazil during the World Cup and 2016 Olympics."
Lenovo is paying CCE's shareholders approximately BRL300 million (US$147 million), in a combination of cash and stock, for 100% of the company. Lenovo will retain CCE's management team including its founder and CEO, Sverner, in the combined company. CCE's management will work closely with Lenovo's new country leadership to drive both businesses, Lenovo said.
The acquisition is subject to customary closing procedures and is expected to close in the first quarter of 2013.
During and after the transition from independent operations to the deal close, both companies expect that all their existing related operations, including manufacturing, customer service, product delivery and warranty fulfillment, will not be interrupted. The current product brand names of CCE and Lenovo will continue, while leveraging each other's strengths.
Sources from the notebook supply chain in Taiwan pointed out that after Lenovo acquires CCE, the vendor will be able to expand its sales channels in Brazil and will also have more influence in the local procurement market.
In addition, CCE's smartphone business is also expected to help Lenovo, which has been aggressively trying to expand in non-PC industries, to increase its non-PC business contribution.
Brazil is currently the largest PC market in Latin America and most PC brand vendors are aggressively trying to expand their share in the market. The largest local brand in Brazil is Positivo and Lenovo was previously reported as having an interest in acquiring Positivo, but since the two sides were unable to reach an agreement, Lenovo has turned its sights to CCE.
In the second quarter of 2012, the top-five desktop vendors in Brazil were Positivo, Dell, Hewlett-Packard (HP), Lenovo and CCE, while in the notebook segment, Samsung was the largest vendor, following by Positivo, Acer, HP, Dell, Asustek, Lenovo and CCE. With the acquisition, Lenovo will not see any change in its desktop ranking and will remain as the fourth largest, but in the notebook segment, the company will be able to rise to the sixth largest, only slightly behind Dell at fifth, the sources noted citing figures from IDC.
Since the PC market is in the phase of seeing stagnant growth, Lenovo, which is aiming to become the largest PC vendor worldwide, is now targeting emerging markets including India and Brazil. Rumor about Lenovo having an interest in India-based PC player HCL have also been circulating in the PC market recently.
Source: DigiTimes
