Reports from Taiwan suggest that Lenovo is considering buying Compal’s 49% stake in their joint venture OEM business, LCFC (Hefei) Electronics Technology.
LCFC started production at the end of 2012, primarily undertaking OEM production of notebooks and all-in-one PCs. Inital capacity for notebooks was 300,000 to 500,000 units, which has since increased to one million units now. Under the terms of the JV agreement, Compal has a put option to sell LCFC shares, while Lenovo has a call option to buy. The total transaction price cannot exceed $750 million, considerably higher than Compal’s initial investment in the venture of $48 million.
