Lenovo not going to buy just for the sake of buying

RETAIL THERAPY::The world’s largest PC maker announced it will look to improve sales and seek new products through business acquisitions

Bloomberg

Fri, Oct 18, 2013 - Page 15

Lenovo Group Ltd (聯想), linked to speculation about buying assets from BlackBerry Ltd and International Business Machines Corp, said it is hesitating with deals amid ample opportunities in order to avoid overpaying.

“We will not buy for the sake of buying,” chief financial officer Wong Wai Ming (黃偉明) said in an interview at the company’s Beijing headquarters on Wednesday. “Even when an opportunity, on the face of it, makes perfect sense for us to do it, it may not happen.”

To counter falling global PC shipments, Lenovo is trying to spur sales of its mobile devices and push into the market for storage equipment and servers running corporate networks. With US$3.1 billion in cash at the end of June, chief executive officer Yang Yuanqing (楊元慶) has said he is willing to strengthen new business through acquisitions.

“Lenovo has very prudent matrices when looking at acquisitions,” Hong Kong-based analyst at Jefferies, Ken Hui, said.

“They want to make sure, if it’s a loss-making business, that there is a strong plan to turn losses into profit, soon,” Hui added.

Lenovo is looking to new products for growth amid slumping PC demand. Worldwide PC shipments in the third quarter fell 8.6 percent, the sixth consecutive quarterly decline, reaching the lowest level for the period since 2008, market researcher Gartner Inc said on Wednesday last week.

The company said in May it would boost smartphone shipments to 50 million this fiscal year from 29 million last year.

Lenovo will be more “proactive” on acquisitions, Yang said in an August interview without naming targets. The company plans to double its share of the market for storage equipment within three years, and a good acquisition could speed that process, he said in a June interview.

Smartphones and enterprise computing remain areas Lenovo wants to expand, Wong said.

There are “a lot of opportunities” for acquisitions, he said, without identifying any.

The firm’s cash in hand and ability to secure additional funds mean it can consider most assets, he said.