China's Lenovo Group has confirmed - in an announcement to the Hong Kong Stock Exchange - that it is in talks with a major international IT company regarding an acquisition. The other party was not named. The announcement comes amid reports that Lenovo is talking to IBM regarding an acquisition of IBM's personal computer business.
Neither company commented regarding the report, which said IBM was also talking with at least one other company on a possible deal.
Lenovo said the talks were at an advanced stage but no definitive agreement or letter of intent has yet to be signed. If the talks are successful and an agreement signed, it may constitute a very substantial acquisition, it said. A draft of the announcement regarding the acquisition was also supplied to the Hong Kong exchange and said it hoped to release a formal announcement as soon as possible.
The announcement was submitted as part of the process to resume trading in Lenovo shares, which had been suspended since Monday morning.
The company requested that trading resume on Tuesday but later in the morning requested it remain suspended "pending further announcement regarding developments with the proposed acquisition."
The two companies will create a joint-venture that will own IBM's PC business, said the report, which quoted "people familiar with the negotiations".
Lenovo is expected to pay up to $US2 billion to own a majority of the new company and IBM would hold a minority stake, the report said.