Lenovo Group Ltd. is assessing potential acquisition targets and strategic alliances, including a deal with BlackBerry maker Research In Motion Ltd., as the second-largest producer of personal computers tries to bolster its mobile-device business.
“We are looking at all opportunities -- RIM and many others,” Chief Financial Officer Wong Wai Ming said today in an interview at the World Economic Forum's annual meeting in Davos, Switzerland. “We'll have no hesitation if the right opportunity comes along that could benefit us and shareholders.”
RIM began a review of its strategic options last year after losing market share to smartphones such as Apple Inc.'s iPhone and Samsung Electronics Co.'s Galaxy, raising speculation that it could be a takeover target. Beijing-based Lenovo, which bought International Business Machines Corp.'s PC unit in 2005, is considering acquisitions and adding new products as competition from tablets hampers profit growth.
“Long term, we are in a declining PC market,” said Jean- Louis Lafayeedney, an analyst at JI Asia in Hong Kong. Still, Lenovo “can leverage the scale they have in PCs to develop the mobile Internet side of the business.”
Eoin Treacy's view Research In Motions reputation suffered
when its messaging system failed last year and its core of business customers
could not communicate. This issue has apparently been tackled in the next generation
of products by allowing corporations to run the service over their own networks.
There is also a great deal of optimism about the prospects for the company's
newest line of phones. The success of this product launch is likely to be of
existential importance for the company. Rumours of a potential takeover represent
an additional catalyst for appreciation and are particularly relevant considering
the extent to which the share price has fallen from its 2009 peak. (Also see
Comment of the Day on January
Dell's efforts to go private and Lenovo's attempts to gain market share are representative of the competition in the sector but also potential opportunity as the pace of M&A activity remains robust. Nokia has also rallied of late and shares a similar pattern to Research In Motion, might it also be a takeover candidate?
As highlighted in Comment of the Day on Monday, a number of previously depressed technology shares are rallying from historically low levels. Yahoo, Hewlett Packard, Xerox and Juniper Networks are some examples and one could not rule out that some of these companies could become takeover candidates.