Japan’s Fujitsu Ltd yesterday said it had agreed to merge its struggling PC business with Lenovo Group Ltd (聯想), giving the Chinese computer giant a controlling share of the business.
Tokyo-based Fujitsu said it had “decided to formally sign a deal” with Lenovo, the world’s largest PC maker, and the government-backed Development Bank of Japan (DBJ) on a “strategic partnership” to develop and sell PCs.
Lenovo will hold 51 percent of the shares in Fujitsu’s PC subsidiary, while the DBJ will hold 5 percent, Fujitsu said in a statement.
The deal should allow Fujitsu to pour more resources into its profitable IT services operations, while also pushing ahead with a sweeping restructuring program that is to include 3,200 job cuts.
The decision came after Fujitsu last month said it was in talks with Lenovo about a potential deal, which pushed Fujitsu shares up by 7.8 percent.
However, after the announcement Fujitsu shares were trading down 2.44 percent at ￥874.1.
The company had been in talks with Toshiba Corp and Vaio Corp to merge their once high-flying personal computer businesses, but those negotiations failed to result in a deal.
Lenovo is struggling to find growth in its key divisions of personal computers, smartphones and servers.
The company yesterday reported a 5 percent jump in revenue to US$11.8 billion in the quarter ended September, surpassing projections for US$11.3 billion and marking the biggest rise since the same period in 2015. Net income fell 11 percent to US$139 million, which was bolstered by accounting gains.
Lenovo said PC shipments climbed 17 percent from the previous quarter, allowing it to arrest market share losses, adding that its struggling smartphone division also made headway in Latin America and western Europe.
“Our mobile business turnaround is still in progress,” Lenovo chief executive Yang Yuanqing (楊元慶) said in a statement.
Additional reporting by Bloomberg
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