Lenovo closed its $1.75bn acquisition of IBM’s Personal Computing Division earlier this week in a deal comprising $650m cash, $600m of common stock, and $500m in assumed debt. It also moved its corporate headquarters from China to Purchase, New York.
The deal originally gave IBM an 18.9% share in Lenovo, which will be reduced to 13.4% on the closure of the share buyback plan. Lenovo is acquiring 435,717,757 non-voting shares from IBM at HKD 2.725 ($0.35) per share.
Lenovo will finance the purchase using part of the $350m in venture capital funding it announced in March. The funding round, which is yet to close, involves Texas Pacific Group investing $200m, General Atlantic $100m, and Newbridge Capital the remaining $50m.
Assuming the investment deal goes through and the share repurchase is approved, IBM will end up with a 13.4% stake in Lenovo, with Texas Pacific Group holding 5.8%, General Atlantic 2.9%, and Newbridge Capital 1.5%.
The company’s largest shareholder will remain the Chinese government-backed conglomerate Legend Holdings, with 43.2%, while company directors will own 0.6%, and 32.6% will be publicly traded.
