I'm reading through some old stories in my aggregator tonight getting caught up, and in reading a story back from March 2005 that discussed the rise of chinese brands and business, this quote caught my attention.
Lenovo Group, China’s leading PC vendor, agreed to pay about $1.8 billion in cash and equity for IBM’s PC business. Overnight, Lenovo became the world’s third-largest personal computing company, with a worldwide market share of about 8%. (The leader, Dell, has about 18%.)
- via Fusionbrand
In December 2004, Lenovo's valuation (how much their company is worth) was approximately $3 billion.
As of today, its almost $3.25 billion.
Almost two years later, the overall value of the company has only grown around 6%. Lenovo could have put their money in a savings accounts and created more value for their shareholders.
When the deal went down, all Lenovo and IBM talked about was the synergies the deal would create, about buying a big established brand, the value of key technical assets, the upside associated with their intensely loyal customers.
A lot of this this sounds a lot like the reasons being floated by Google about why they bought YouTube.
I'm not sure I'm buying it anymore than Lenovo's shareholders are.
