China's Lenovo Group has confirmed it to be in acquisition talks with a "major international IT company", the company confirmed this morning.
Lenovo is thought to be in discussion with IBM regarding a purported $2 billion sale of the latter's PC manufacturing business, though this has not been confirmed by either company. The Chinese manufacturer declined to name the company it is in discussion with this morning.
The New York Times reported on Friday that Lenovo is talking to IBM regarding an acquisition of IBM's personal computer business.
Lenovo said the talks are at an advanced stage but no definitive agreement or letter of intent has yet to be signed. If the talks are successful and an agreement signed, it may constitute a very substantial acquisition, it said. A draft of the announcement regarding the acquisition was also supplied to the Hong Kong exchange and it said it hopes to release a formal announcement as soon as possible.
The announcement was submitted as part of the process to resume trading in Lenovo shares, which had been suspended since Monday morning. The newspaper report on Friday was published towards the end of the Hong Kong trading day. On Friday the company's shares closed at HK$2.675.
The company requested that trading resume on Tuesday but later in the morning requested it remain suspended "pending further announcement regarding developments with the proposed acquisition."
A deal between the Lenovo and IBM could be announced as early as today, according to a report in this morning's Wall Street Journal.
The two companies will create a joint-venture that will own IBM's PC business, said the report, which quoted "people familiar with the negotiations." Lenovo is expected to pay up to $2 billion to own a majority of the new company and IBM will hold a minority stake, the report said.