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Lenovo might make play for Lexmark
Lenovo is gunning for a piece of the printer market and could lead a consortium to buy Lexmark, according to industry analysts..
In
a presentation for clients, analysts Larry Jamieson and Jiqiang Rong of
Lyra Research in the US, said rumors are rampant in China and on Wall
Street that a Lenovo-led group, backed by the Chinese government, might
make a play for Lexmark as the PC maker seeks to build a major printer
business within two to five years.”It’s rather difficult to get moving
forward on building a printer business; if you have to build from the
ground up,” Jamieson said in the presentation, which was
webcast.”Lexmark does have inkjet and laser technology. They could use
a cash infusion and an investment infusion.”Lexmark manufactures
Lenovo-branded printers for Lenovo, but the business is only a sliver
of the PC company’s sales.Lenovo and Lexmark spokespeople on Wednesday
declined to comment on the analysts’ remarks, each saying they wouldn’t
discuss rumour or speculation.Jamieson made his remarks while
displaying a chart on potential Lenovo printer acquisition targets,
titled “One Obvious Candidate: Lexmark. Rumors Already Flying in China
and on Wall Street.He listed reasons why a Lenovo acquisition of
Lexmark would make sense, including the following: Lexmark’s market
capitalization has dropped 50 percent since 2004; Lenovo could deal a
blow to rival Dell, which has a deal with Lexmark to build Dell-branded
printers; and Lexmark and Lenovo share a corporate heritage with
IBM.Lexmark is an IBM printing division spinoff, and Lenovo last year
bought IBM’s PC business, he noted.”Lenovo-Lexmark rumors have been
flying around for quite a while,” Jamieson said.In addition, Lenovo CEO
William Amelio and Lexmark CEO Paul Curlander are both former IBM
executives.
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