IBM prunes Lenovo stake

New owner of ThinkPad and ThinkCentre lines sees partner reduce stake by about 25 per cent, and Big Blue telegraphs a continued pullout

Trading in shares of Chinese computer manufacturer Lenovo was suspended today when news broke of a major sell-off by large stakeholder IBM. Reports indicate that Big Blue offloaded some 300 million shares, or roughly one-quarter of its stake in Lenovo. The sale reduces IBM's total interest in Lenovo below the 10 percent mark.

Lenovo burst onto the international computing stage in 2005 with the purchase of IBM's line of desktop and notebook computers and notebook products, including the highly regarded ThinkPad laptop brand. ThinkPad has remained the high-profile performer for Lenovo, which retained IBM's ThinkCentre enterprise PC mark and replaced the struggling Aptiva consumer brand with the 3000 series PC.

The move further distances IBM from the desktop computing business it was once literally synonymous with, during a time when second-tier x86 computers were routinely referred to as "IBM clones" or "IBM-compatible." Now a diminishing minority stake is all that remains of IBM's interest in the market it pioneered with the original XT personal computer.

Publicly, Lenovo is not treating the sell-off as a vote of no confidence. "IBM has been and continues to be a major partner and customer of Lenovo, and little or no impact on our highly successful partnership," says Lenovo spokesperson Ray Gorman.

In a prepared statement, IBM foreshadows its likely intent to continue disposing of its Lenovo stake. "A previously announced agreement between IBM and Lenovo allows IBM to fully divest its equity stake in Lenovo after November 1, 2007. The latest reduction of IBM participation in Lenovo was taken under that agreement," the company says. "IBM and Lenovo remain strategic partners as Lenovo continues to provide its industry leading products to IBM customers." When the desktop computer product line was first sold, IBM was required to hold on to part of its Lenovo stake through mid-2008.

Reports put the proceeds of the sale for IBM at just under $125 million, roughly ₤62.4 million.

Featured Resources

2021 Thales cloud security study

The challenges of cloud data protection and access management in a hybrid and multi cloud world

Free download

IDC agility assessment

The competitive advantage in adaptability

Free Download

Digital transformation insights from CIOs for CIOs

Transformation pilotes, co-pilots, and engineers

Free download

What ITDMs did next - and what they should be doing now

Enable continued collaboration and communication for hybrid workers

Most Popular

What should you really be asking about your remote access software?

What should you really be asking about your remote access software?

17 Nov 2021
How to move Microsoft's Windows 11 from a hard drive to an SSD
Microsoft Windows

How to move Microsoft's Windows 11 from a hard drive to an SSD

24 Nov 2021
Nike to take customers into the metaverse with 'NIKELAND'

Nike to take customers into the metaverse with 'NIKELAND'

19 Nov 2021