Lenovo Buys Back its Former Mobile Phone Manufacturing Subsidiary

­China's Lenovo Group has announced that it is buying back the mobile phone company that it sold nearly two years ago. The company is paying US$200 million in cash and shares to buy Lenovo Mobile Communication Technology from a group of investors led by Hony Capital, the private equity arm of Legend Holdings.

In January 2008, Lenovo sold the company for US$100 million to Legend Holdings, although it should be noted that Legend Holdings itself is the major shareholder in Lenovo. The transaction is conditional upon Lenovo independent shareholder approval.

Lenovo Mobile now ranks No.3 in China's mobile handset market and is the No.1 domestic brand.

With this acquisition, Lenovo said that it aims to maximize the combined synergies of the two companies in product innovation, lean manufacturing, strong distribution channels and retail presence to lead the market for new mobile handheld devices in China.

Yang Yuanqing, CEO of Lenovo Group, said: "As Lenovo's global PC business continues to make steady progress, we view mobile Internet as a key growth opportunity moving forward globally. Lenovo has prepared itself in this area. We have developed first class products with excellent hardware and operating systems integration. We will launch these innovative new products in China soon. With Lenovo's brand, strong channel and excellent operation platform, we're confident in our ability to execute our mobile Internet strategy and make it our next growth engine after the China business."

Posted to the site on 27th November 2009