IBM's PC arm is sold to Chinese

HI-TECH giant IBM confirmed a landmark deal today to sell its personal computer business to a Chinese manufacturer for $1.75bn (£900m) in cash, shares and assumed debt.

The transaction, which had been widely expected, underscores both the rising commercial clout of Chinese mainland companies and IBM's long-term shift away from a business that it helped to create.

At a ceremony in Beijing Liu Chuanzhi, chairman of Lenovo Group, China's largest home-grown computer maker, said the transaction would make his company the thirdlargest PC group in the world.

IBM will have an 18.9% stake in Lenovo, which will take control of research, development and manufacturing at the PC unit.

The deal is expected to be completed in the second quarter of next year.

Founded in 1984, Lenovo has grown from a start-up company that first based its operations out of a cottage, into a commercial behemoth that is competing in Asia for computer sales against market-leaders Dell and Hewlett-Packard.