Lenovo buys stake in PCCW’s IT business units for $613 mn

Lenovo Group will buy stakes in two units of investment holding firm PCCW for $613.6 million in cash and stock.
Lenovo event in 2016Lenovo will buy an 80 percent stake in Digital Era Enterprises and a 20 percent stake in PCCW Network Services, a holding company for a unit that provides technology solutions to government entities in Hong Kong.

“The transaction allows the company to expand its IT services capabilities, its suite of service offerings as well as the geographic and vertical coverage of customers and partners,” China-based Lenovo said in a news statement on June 14.

Lenovo, which earlier warned of a hit to shipments in the short term due to China’s COVID-19 lockdowns exacerbating chip shortages, will pay $513.6 million in cash and issue 86.4 million shares at HK$9.025 per share.

PCCW anticipates a gain of $100 million from the disposal. PCCW will use the proceeds to invest in growth areas and to repay debt, among others.