Just as we were finalising our issue this week, we spotted the news that after some delay from the original concept, Fujitsu and Lenovo have formed a PC Joint Venture. We first reported on the possibility of a deal between the companies more than a year ago (Fujitsu In Talks with Lenovo over PCs and the companies said they were close to a deal six months ago. (Fujitsu & Lenovo Close to Deal on PCs)
The companies, along with the Development Bank of Japan Inc. (“DBJ”) announced that they would create a joint venture for the research, development, design, manufacturing and sales of Client Computing Devices (CCD) for the global PC market. Fujitsu will sell a 51% stake in its wholly owned subsidiary Fujitsu Client Computing Limited (“FCCL”) to Lenovo and a 5% stake to DBJ. After the transaction, FCCL will become a joint venture company (“JV”) owned by Fujitsu, Lenovo and DBJ and will continue to be known as Fujitsu Client Computing Limited.
The transaction is expected to be closed in 1Q FY2018. The aggregate consideration received by Fujitsu will be ¥28.0 billion ($245 million) that includes ¥25.5 billion from Lenovo and ¥2.5 billion from DBJ, but may vary depending on the performance. After the transaction, Kuniaki Saito, the current representative director and president of FCCL, will will continue in those positions.
After the JV is established, FCCL products will continue to be distributed and sold under the Fujitsu brand name. Fujitsu will continue to serve corporate customers worldwide directly or indirectly through its valued channel partner network and provide the related after-sales support and services. FCCL will serve the consumer market in Japan either directly or indirectly through mass retailers and provide product support and services.
Through this strategic collaboration, Fujitsu and Lenovo aim to drive further growth, scale and competitiveness in the PC businesses both in Japan and worldwide. The JV will leverage Fujitsu’s capabilities in global sales, customer support, R&D, highly-automated and efficient manufacturing and systems integration that meet customers’ demand. Furthermore, it expects to benefit from Lenovo’s global scale and presence.
Through investment in JV, DBJ will support FCCL’s sustainable growth and provide financial expertise from the perspective of a financial institution.
Fujitsu will continue to offer a high-quality, innovative, secure, and reliable Fujitsu branded CCD portfolio to its corporate customers worldwide, contributing to their digital transformation journey, and co-creating the workplace of the future by integrating PC offerings with Technology Solutions.
Analyst Comment
Well, this has taken some time, but it’s quite a convenient time for the event to happen as we will be attending the Fujitsu Forum in Munich next week and will, no doubt, here more. The deal gives control to Lenovo and it should be able to help FCCL to get lower costs because of the scale. There will inevitably be some duplication of products between the brands, but it may take time for the bugs to be ironed out. In monitors, in Europe, Lenovo is bigger than Fujitsu (around double in volume and less than that in value), but has been somewhat struggling in recent years. It really has a product range that is not optimised for the kind of FTS clients in the German corporate market, so it would be logical to continue to have some products controlled from Augsburg, by FTS, as it does at the moment. However, I’m sure that the discussions with TPV et al will be a little different, given the scale of Lenovo’s business.
Lenovo has been increasing the resource in its monitor business in Europe recently and we can reveal that Melanie Tarpey, a veteran of many years running peripherals for Acer, has been recruited to promote monitors, among other products. (BR)
