Chinese electronics manufacturer Lenovo (News - Alert) today agreed to buy CCE, an electronics manufacturer based out of Brazil. According to reports, Lenovo is hoping this acquisition will renew profit growth, which has been slowing lately for the company.
The base price for the deal is about $148 million, but is subject to adjustments. Indeed, payment could include up to an additional $200 million or so, depending on performance-based indicators over the next four years until December 2016.
CCE is currently Brazil's largest domestic manufacturer of electronics, including PCs, DVD players and stereos. Lenovo's purchase of the company will nearly double its share of the PC market in the world's sixth-largest economy. The Chinese company already ranks as the number two PC manufacturer in the world.
"CCE is an excellent fit with its four-screen product portfolio and a valuable manufacturing base in Brazil," Yuanqing Yang, chairman and CEO of Lenovo Group, said in a statement.
More importantly, the deal will add mobile phones and televisions to Lenovo's product line in Brazil. The company recently stated that it wants to acquire a number of mobile phone manufacturers in order to "enhance competitiveness" when expanding in new fields.
The PC industry, though not rapidly booming like mobile, is still a lucrative one, however. In total, Lenovo values the Brazilian market for PCs, smartphones and SmartTVs at about $124 billion.
"In recent years, we have established a No. 1 position in emerging markets, and we hope to do the same in Brazil," Lenovo said in a statement. "We are attacking hard in the large, fast growing BRIC (Brazil, Russia, India, China) markets."
Lenovo plans to keep CCE's management team as it is currently.
While the company is focusing on buying up other companies to expand its bottom line, Lenovo is continuing to roll out products, unveiling three new additions to its IdeaPad laptop line, the S300, S400 and S405.
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Edited by Brooke Neuman