Lenovo Group, a Chinese computer company, is investing $614 million in two digital operations of Hong Kong telecoms company PCCW Ltd, counting on a post-COVID rebound and a hybrid work model to fuel IT services demand.
Lenovo, the world’s largest computer manufacturer, announced late Tuesday that it will purchase an 80 per cent investment in Digital Era Enterprises and a 20 per cent stake in PCCW Network Services, a holding company for a subsidiary that provides technology solutions to Hong Kong government institutions.
Lenovo stated that the transactions will diversify its companies and were critical to the company’s long-term success.
“The deal enables the firm to extend its IT services capabilities, its suite of service offerings, and the geographic and vertical coverage of clients and partners,” the company stated. Lenovo will pay PCCW $513.6 million in cash and issue 86.4 million additional shares, or a 0.71 per cent ownership, at HK$9.025 each. Last month, Lenovo warned of short-term damage to shipments due to China’s COVID-19 lockdowns worsening chip shortages.
Lenovo reported an 18 per cent increase in revenue to $71.6 billion for the fiscal year ending in March, with its Infrastructure Solutions Group (ISG) business growing by 13% to $7.1 billion and its newly created Solutions and Services Group (SSG) growing by 30% to $5.4 billion.
Lenovo claims that SSG, which benefits from rising IT services demand, is the key to the company’s long-term success.Learn more about this at usnews.com