Lenovo Group, the world's third-largest personal computer maker, has entered into a $300 million joint venture with contract laptop PC maker Compal Electronics in order to boost production and capture global share.
The JV with Compal is the latest move by Lenovo to sustain its rapid growth that has enabled the $21-billion company to outperform its top five industry rivals for nearly two years.
Earlier this year, Lenovo entered into a PC joint venture with NEC in Japan and later acquired Germany-based Medion, a major personal technology company, for $771 million in cash.
The two companies will invest $100 million initially, followed by an additional $200 million in the next 18 months, to start up the new company and construct a manufacturing plant in the eastern Chinese city of Hefei.
Hong Kong-listed Lenovo will hold a 51-per cent stake in the joint venture and Compal 49 per cent.
The agreement with Compal Electronics, the world's second-largest contract maker of notebooks by revenue after Quanta Computer, will give Lenovo additional manufacturing capacity needed for its planned growth in the global PC market, Lenovo said in a statement.