Back in 2012, Compal Electronics purchased a 49% stake in Lienpal Hefei, a notebook manufacturing joint venture with Lenovo, for $147 million. Compal announced this week that it will sell its 49% stake in the company back to Lenovo for $257 million, as a cash-only deal between Compal subsidiary Billion Sea Holdings and a Chinese investment company specified by Lenovo.
Under the terms of the original agreement, Compal could’ve sold its share for as much as $750 million, but Compal’s Gary Lu remarked, “It was a different time with different terms back then”.
Lu went on to say that the company has accomplished its phased goal of investment in the venture, having recorded $500 million to $600 million in profit contribution from its stake in Lienpal. He also reiterated that Compal is keen to continue to do business with Lenovo in the future. The proceeds from the sale will be funnelled into Compal’s production operations.
