Lenovo to buy Lexmark?

Lenovo to buy Lexmark?

April 1, 2016 Reported by The Recycler Magazine

The Chinese PC manufacturer is said to be “currently in discussions” with Lexmark to acquire its operations.

A selection of Lenovo's own printers

A selection of Lenovo’s own printers

ChannelNews reported on claims from “insiders” that suggest Lenovo is looking to acquire Lexmark, adding that it understands “Lenovo is negotiating with Lexmark management and Goldman Sachs”. The investment bank was hired by Lexmark last October to “explore strategic alternatives”, and the OEM pointed out at the time that these could include “a sale of the entire company or the spinoff of part of the company to either strategic or financial buyers”.

The most recent rumours had suggested that either Canon or Ricoh would buy the OEM’s hardware business, after The Recycler reported the OEM has already “received initial bids” for its software unit, while in January this year, it was rumoured Konica Minolta was looking to buy Lexmark. 550 jobs – or about four percent of its worldwide workforce – were also announced to be cut in February after poor quarterly results.

The news site stated that Lenovo “has a reputation for buying up distressed businesses”, with such acquisitions including IBM’s Think Pad and server units and Motorola, and speculated that the acquisition of Lexmark “would put pressure on Lenovo arch rival” HP Inc. The insiders also claimed that the deal would be a “logical fit” for Lenovo, which has grown “during the past six months” in both PC and server markets.

Another source added that “a deal between Lexmark and Lenovo would make a lot of sense; Lenovo are very good business operators. They have the relationships and the distribution channels, and a host of compatible products”. Apparently, earlier in 2016 a “major global company approached Lexmark in the USA, to do a business deal”, but after the deal “was agreed in principle”, Lexmark’s management “rescinded the deal, claiming that Lexmark was in discussions with Lenovo and that the deal could not go ahead”.

ChannelNews cited another source’s point of view that “Lexmark is getting ready for sale”, and has “been rushed into selling itself” after a “series of strategic missteps”.