Lenovo confirms acquisition of IBM's PC unit

update It's confirmed: China's largest PC maker will acquire Big Blue's PC business with cash and stock.

update Lenovo has confirmed it will acquire Big Blue's PC unit including the IBM Think brand, paying US$650 million in cash and an additional US$600 million in stock. IBM will hold 18.9 percent of Lenovo's stock.

At a joint media conference this morning, the companies also confirmed Lenovo's current CEO Yang Yuan Qing will head the business as its chairman, while IBM's Stephen M. Ward Jr. will take over as CEO. Ward was the vice president of IBM's PC business unit.

IBM's renowned Think brand will be transferred to Lenovo which will have the right to the brand for five years. IBM will also continue to sell computers under the brand of IBM, thereby becoming Lenovo's largest customer.

Lenovo Group Chairman Liu Chuan Zhi, who announced his decision to step down, said Lenovo's acquisition of IBM's PC business is the start of its move towards becoming an international company.

According to research firm Gartner, Lenovo is the biggest PC manufacturer in China and ranks ninth amongst the world's top PC makers. As at Q3 this year, Lenovo leads the China market with 26.4 percent market share. Fang Zheng is placed second with 10.3 percent market share, followed by Tong Fang with 8.6 percent share. Dell, IBM and HP trail behind in fourth, fifth and sixth positions respectively.