主题：【IT风云】联想集团将IBM PC部分收购，合同金额12.5亿美元。 -- Highway

HONG KONG/SAN FRANCISCO (Reuters) - IBM is selling its PC-making business to China's largest personal computer company, Lenovo Group Ltd., for $1.25 billion, marking the U.S. firm's retreat from an industry it helped pioneer in 1981.

The deal, which forms the world's third-largest PC maker, is the largest overseas acquisition by a Chinese company and the latest example of a mainland firm buying a Western brand to make its mark on the world stage.

It frees International Business Machines to focus on higher-margin businesses such as computer services and software. IBM will book a pre-tax gain of $900 million to $1.2 billion and improve gross profit margins by 3 percentage points, it said.

"On paper, this goes a way to achieving what Lenovo and IBM are hoping to achieve. Now it's up to execution," said Gartner analyst Martin Gilliland.

The deal calls for Lenovo to pay IBM $650 million in cash, $600 million in stock and assume $500 million in debt. It took 13 months to negotiate and is expected to close in the second quarter of next year.

IBM will hold an 18.9 percent stake in Lenovo, which will relocate its PC headquarters from Beijing to New York and possibly list shares on Nasdaq or the New York Stock Exchange (news - web sites). Stephen Ward, IBM senior vice president, will become Lenovo's chief executive.

PRICE DISAPPOINTS

"The price tag was a little bit lower than I would have expected," said Marty Shagrin, an analyst at Victory Capital Management in Cleveland, Ohio, which holds IBM shares in its $40 billion portfolio.

"But obsessing about the price misses the point that IBM for a long time has wanted to become more of a services and software company."

The deal makes Lenovo part of a small but growing group of Chinese manufacturers buying overseas brands. Notable among them is TCL International Holdings Ltd., which controls the RCA television brand through a joint venture it set up with France's Thomson

"Chinese companies want to have a bigger part of the value chain," said William De Vijlder, chief investment officer at Fortis Investments. "We will see that in the future, that Chinese companies who have been very successful, who are cash-rich, will use their financial states -- their financial health -- to buy stakes in other companies."

For Lenovo, which is battling intense competition in its home market, the deal with the world's largest computer company marks a breakthrough in its efforts to build its business overseas. It gives it a brand ranked the world's third-most valuable by BusinessWeek/Interbrand.

Lenovo will jump from eighth place among PC makers to number three, combining its 2.2 percent share with the 5.5 percent held by IBM, according to Gartner. The combined businesses had sales of $12 billion last year.

Dell Inc. leads the market with a 16.7 percent share, followed by Hewlett-Packard at 15 percent.

Including debt, the deal values IBM's PC unit at $1.75 billion, less than Lenovo's market capitalization of US$2.56 billion -- even though IBM's PC business, which UBS said was loss-making last year, is three times Lenovo's size.

State-controlled Lenovo dominates China's PC sector, the world's second largest, where its market share in excess of 25 percent is more than double that of its nearest rival. One of the best-known brands in China, Lenovo is little-known elsewhere.

"Our unwavering goal has been to create a truly international enterprise," said Liu Chuanzhi, chairman of Lenovo, who will be replaced by current CEO Yang Yuanqing when the deal closes.

DEAL DETAILS

Lenovo will take ownership of IBM's "Think" family, including its ThinkPad notebooks and its ThinkCenter desktop line. The products will retain the IBM logo for up to five years before switching to a Lenovo brand.

The Chinese company will also buy out IBM's interest in its PC-making joint venture with Great Wall Technology, China's number two PC maker.

Lenovo will hire 10,000 PC IBM employees, including about 2,300 in the United States -- mostly in product design, marketing and sales. The remaining 7,700 are mostly in the Great Wall venture in China.

"The PC business is rapidly taking on characteristics of the home and consumer electronics industry, which favors economies of scale, pricing power and a focus on individual users and buyers," Sam Palmisano, IBM chairman and CEO, wrote in a letter to staff.

The Chinese firm will issue shares to IBM at HK$2.675 each, which was their closing price on Friday. Lenovo's stock, down 20 percent this year on investor worries about anaemic growth, has been suspended since Monday morning.

Tat Au Yang, managing director of Apex Capital Management in Hong Kong, thought the stock would remain steady when it resumed trade on Thursday.

UBS analyst Joe Zhang said the deal was attractively priced for Lenovo but maintained his "reduce" rating with a HK$1.80 target price.

Merrill Lynch advised IBM on the deal, while Goldman Sachs represented Lenovo.