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Lenovo Buys into Brazil

The acquisition will make it Brazil’s third-largest PC vendor

Lenovo, which was just saying something about looking for strategic growth acquisitions, said Wednesday that it has struck a deal to buy Brazil's largest consumer electronics maker, a group of three companies called CCE, for $148 million in cash and stock.

The acquisition will make it Brazil's third-largest PC vendor.

CCE, with revenues of $783 million last year, makes PCs, phones and TVs at seven factories in Brazil, one of the emerging BRIC countries and still a top PC market.

By IDC's tally, nearly four million units shipped there in Q2 out of a global total of 85 million.

CCE includes Digibrás Indústria do Brasil SA, Digiboard Eletrônica da Amazônia LTDA and Dual Mix Comércio de Eletrônicos LTDA.

Lenovo said the deal would bring it "a stronger market position, more comprehensive product offerings, enhanced brand awareness, and a larger scale of operation and presence in Brazil."

CCE's factories are supposed to let it lower prices. Lenovo also intends to build a factory in Brazil.

The PC business it bought from IBM in 2005 was focused on the enterprise, not the consumer.

Lenovo is trying to pass HP as the world's largest PC maker by seeking out lower-margin markets. The acquisition of Medion in Germany and NEC's PC unit helped. In Q2 they were close. HP had a 14.9 % to Lenovo's 14.7%, Gartner said.

Meanwhile, on the other side of the world, NEC sold its whole 2.7% stake in Lenovo to raise cash. It grossed $229 million. NEC had 281.1 million Lenovo shares, which Lenovo traded to NEC last year for a 51% stake in their Japanese joint venture, which the Chinese company hopes will bring it more server skills. NEC is cutting 10,000 jobs, 8.6% of its workforce, on continued losses.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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