Lenovo Group, the world’s second largest PC company, on Wednesday announced the acquisition of the CCE, a widely known in Brazil as a leader in PCs and consumer electronics. The acquisition significantly expands 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.
“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. CCE is an excellent fit with its four screen product portfolio and a valuable manufacturing base in Brazil,” said Yuanqing Yang, chairman and chief executive of Lenovo Group.
The transaction is expected to align profitable, fast-growing, consumer focused CCE with a global partner that will boost its overall strength, innovation capability, product portfolio and supply chain resources. Lenovo promises that Brazilian customers will clearly and immediately benefit from better, even more competitively priced products, coming faster to market from a provider with an excellent combined heritage: a strong understanding of the Brazilian consumer on one hand and a deep innovation capability, unmatched legacy of quality, and global supply chain on the other.
Lenovo is paying CCE’s shareholders approximately 300 million Brazilian Reais ($147.087 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, Roberto Sverner in the combined company. CCE’s management will work closely with Lenovo’s new country leadership to drive both businesses. 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. Lenovo traditionally sustains brands of companies it acquires on the local markets. The approach allows the company to continue enjoy both high volume of scale as well as recognition of local brands.
“CCE’s understanding of Brazil and Lenovo’s global scale and innovation engine are a potent combination. 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,” said Roberto Sverner, founder and chief executive officer of CCE.
The company’s present business plan does not anticipate any workforce restructurings as a result of the acquisition.