Chinese technology giant Lenovo marked the new year's first week by closing its acquisition of Comércio de Componentes Electrônicos (CCE), one of the largest manufacturers of personal computers and consumer electronics products in Brazil.
The HK$1.113 billion corporate takeover, which was first announced in September, is part of a series of strategic investments planned by Lenovo over the past two years to expand the number of plants and manufacturing joint ventures in key locations.
Lenovo, which unseated Hewlett-Packard in the third quarter to become the world's top supplier of personal computers, has been bolstering its in-house manufacturing capabilities as it prepares to compete worldwide in the smartphone, media tablet and internet-linked "smart" television markets.
In a filing with the Hong Kong stock exchange yesterday, Lenovo chairman and chief executive Yang Yuanqing said a cash payment of HK$779.139 million was made on Wednesday to CCE shareholders, led by the privately held Digibrás group.
Lenovo also issued 46.875 million company shares worth HK$333.891 million as part of the deal.
"CCE is an excellent fit with its four-screen product portfolio and a valuable manufacturing base in Brazil," Yang said in September.
"CCE's management, who will become an essential part of our Brazilian operations, knows the Brazilian consumer and will immediately help us establish a strong retail presence [in the market]."
With seven manufacturing facilities in the Manaus Free Trade Zone, CCE mainly makes desktop and notebook personal computers, liquid-crystal display monitors and televisions and mobile phones.
"We believe this transaction is generally in the right direction of what Lenovo should be pursuing in its acquisition strategy," Bernstein Research senior analyst Alberto Moel said in his report about the CCE deal.
Lenovo, which has headquarters in Beijing and Morrisville in North Carolina, has been on an aggressive international expansion drive the past 24 months. In October, the company announced that it would start a production line for its Think brand notebooks, desktops and media tablet in the United States this year. Its first US manufacturing operation will be in Guilford county in North Carolina.
A US$300 million joint venture was formed by Lenovo and Taiwanese firm Compal Electronics in September 2011 to build and operate a new manufacturing centre in Hefei, Anhui province. That same year, Lenovo opened a new laptop factory in Argentina run by partner Newsan Group, bought control of German consumer electronics maker Medion and launched a joint venture with NEC in Japan.