Chinese government sells Lenovo parent stake

The deal places more control of Lenovo's parent in the hands of private investors

A privately owned Chinese group will buy a stake in Lenovo's parent company being sold by a Chinese government academy, the companies said Friday.

China Oceanwide Holdings Group will buy the 29 percent share in Legend Holdings, Lenovo's parent company, for 2.76 billion yuan ($US404 million), a Legend spokeswoman said Friday. A China Oceanwide representative confirmed the deal.

The deal places more control of Lenovo's parent in the hands of private investors, which could influence its business strategy.

The stake is being sold by the Chinese Academy of Sciences, a state-run institution that conducts national research projects. China Oceanwide was the only buyer who met the conditions set in the academy's sale notice, the Legend spokeswoman said. The academy required that the buyer agree not to resell its stake, alter Legend's strategy or propose changes to the company's management for five years. The academy will retain a 36 percent stake in Legend, leaving it the company's largest investor.

China Oceanwide controls companies in industries including real estate, banking and energy.

Legend and China Oceanwide said details of the deal and Legend's new strategy would be available at a briefing next Tuesday. Lenovo declined to comment.

Lenovo, the world's fourth-largest PC maker, began restructuring early this year to refocus on its business in China and other emerging markets. The global economic recession dealt a heavy blow to the company's operations in developed markets. The company has posted net losses for the last three quarters.

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