Lenovo to Acquire Mobile Handset Business for US$200 million

Lenovo Group has announced that it is acquiring the entire interest of Lenovo Mobile Communication Technology Ltd. from a group of investors led by Hony Capital, the private equity arm of Legend Holdings. Consideration of the acquisition is approximately US$200 million in cash and Lenovo shares. Today's announcement signals that Lenovo is gearing up its efforts in the burgeoning mobile Internet market in China. Lenovo Mobile now ranks No.3 in China’s mobile handset market and is the No.1 domestic brand. The transaction is conditional upon Lenovo independent shareholder approval.

Lenovo divested Lenovo Mobile in March 2008 in order to refocus on the Group's core PC business and this acquisition reflects the changed market conditions of the past 18 months. Industry analysts project the China mobile Internet market will grow to exceed US$16 billion by 2014, fueled by the rapid evolution of 3G mobile broadband and accompanying multimedia Internet services.