Lenovo was replaced by lesser-known Chinese brands Oppo and Vivo as part of the top five smartphone vendors for Q1 2016. (Photo : Getty Images)
Lenovo Group Ltd. is looking to splurge $195 million on the acquisition of its joint venture with Japanese group NEC Corp., a move that highlights the Chinese company's efforts to boost its PC business.
Lenovo, the world's largest PC manufacturer, will purchase 44 percent of NEC's shares in Lenovo NEC Holdings (LNH). This would bring Lenovo's share in the 5-year-old JV to 95 percent.
NEC will sell 44,100 shares to Lenovo on July 28. Proceeds will be counted as non-operating income for the 2016 financial year.
NEC said earnings from the sale will be directed toward social infrastructure development and production.
LNH was formed in 2011 in a bid to enhance the two companies' PC business in Japan, which was then the third-largest market for computers in the world.
In a span of five years, the JV has helped Lenovo establish its footprint in Japan, becoming the top PC vendor in the country, followed by HP, Dell and Apple.
According to Gartner analyst Kanae Maite, Lenovo accounts for 25 percent of the Japanese PC market last year.
"[Lenovo's] strong performance in both the consumer and the business PC arenas is a good reason for this deal," Maite told China Daily.
The acquisition, however, comes amid the overall decline in the PC market. Despite being the top-selling PC maker, Lenovo saw shipments dip in 2015.
In a separate report, Gartner said that global PC shipments shrunk 8.3 percent to 75.7 million units in Q4 2015, while overall PC shipments for the year dipped 8 percent to 288.7 million units.
Despite these, a silver lining remains in the PC sector, thanks to the rise of 2-in-1 hybrids, also known as detachable or convertible laptops.
Lenovo itself seems to be confident that the PC sector will be able to pick up its momentum as it adapts to new trends.
"The global PC market won't go down forever. I believe it will maintain at about 250 million units a year," Lenovo Chairman Yang Yuanqing said in a statement last month.
