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Lenovo eyes overseas acquisitions

Lenovo Group Ltd (聯想), China's biggest personal-computer maker, is "interested" in buying companies overseas to expand share outside its main domestic market.

"If there is a good opportunity and it offers good returns to shareholders, we will definitely consider it," chairman Yang Yuan-qing (楊元慶) told reporters in Beijing, where he is attending the annual meeting of the Chinese legislature. "It can help us be more competitive."

Lenovo, which gets more than half of its sales from Asia, is seeking acquisitions after Acer Inc last year foiled its plans to buy Netherlands-based Packard Bell BV and expand its footprint in Europe.

Lenovo's 2005 purchase of International Business Machines Corp's PC business made the company among the world's biggest five computer makers.

Raleigh, North Carolina-based Lenovo, which sells computers to companies in Japan, plans to enter the consumer market there, Yang said yesterday, without giving a timeframe. The PC-maker won't purchase a company in Japan, he said.

The company will focus new investments on markets where the PC penetration rate is low, such as India, Brazil, Mexico, the Middle East and eastern Europe, Yang said. Lenovo has increased its distribution networks in India and eastern Europe and sold more notebooks in China, expanding in emerging markets to narrow the gap with Hewlett-Packard Co and Dell Inc.

The slowing US economy will hurt demand for personal computers, Yang said.

"However, it will hurt us less than our competitors as our main markets are in China, Europe and developing countries," he said. "Domestic demand is still strong."

Lenovo is less dependent on the US, where it started selling to consumers in January.

"We are confident of growing our operations in 2008," Yang said.

The company aims to sell shares listed in China and is awaiting rules from the government permitting so-called red-chip companies, Yang said, reiterating comments made in September. Red-chip companies are Chinese firms incorporated and listed in Hong Kong with controlling Chinese shareholders.
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