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Lenovo ponders buying into Brazil firm

By Wang Xing (China Daily)
Updated: 2008-12-10 07:55

Lenovo Group is reportedly bidding for acquiring Brazil's largest PC maker Positivo Informatica, which may be the largest overseas acquisition by the Chinese champion PC maker since it bought IBM's PC arm in 2005.

The deal, if successful, could help Lenovo speed up its expansion in the emerging market at a time when the PC markets in major developed countries are slwoing due to the financial crisis.

Executives of Lenovo have visited the headquarters of Positivo Informatica in the southern city of Curitiba and showed great interest in buying out the company, reported local media Estado de S. Paulo.

The world's second largest computer maker Dell Inc was also interested in the company, according to the report.

Lenovo yesterday refused to comment on the report, but company Chairman Yang Yuanqing, said last month that the company would focus on expanding business in emerging markets and look for acquisition opportunities despite the gloomy market environment.

While seeing slowdowns in mature markets, Lenovo has been aggressively expanding in emerging markets. Its business increased 180 percent and 100 percent in Russia and India this year, respectively.

In the second quarter, the company's business in Brazil increased by 42 percent, beating market average of 30 percent.

Simon Ye, analyst from research firm Gartner, said Lenovo may transplant its existing experience in China to Brazil if the acquisition succeeds, as both countries are emerging markets.

But Lenovo's sluggish performance in the past quarter, during which the company's profit slumped 78 percent, may complicate Lenovo's acquisition efforts, he said.