Lenovo and NEC on Thursday announced a joint venture to sell PCs in Japan.
Lenovo is China's largest PC maker, and could expand its market presence in Japan through the joint venture. The companies will jointly develop and sell products including PCs and tablets.
The joint venture company could become Japan's largest PC vendor.
During the third quarter of 2010, NEC was the largest PC vendor in Japan, with a 19.8 percent market share, topping Fujitsu, Toshiba and Hewlett-Packard, according to IDC. Lenovo was the world's fourth largest PC maker behind HP, Dell and Acer at the end of 2010.
NEC has been losing money and has sought ways to stem the flow of red ink.
As part of the joint venture, the companies will establish an organization called Lenovo NEC Holdings BV, in which Lenovo will hold a 51 percent share and NEC a 49 percent share. Upon closing the transaction, NEC will receive Lenovo shares worth US$175 million. The transaction is expected to close on June 30.
The announcement comes on the same day NEC reported a loss of 26.5 billion yen (US$322 million) for the quarter ending Dec. 31, a decline of 6 percent compared to the same quarter in 2009. NEC sales totaled 720.7 billion yen for the period, down 12.7 percent.