Case Study of a Successful M&A—Concluding Thoughts on Lenovo’s Acquisition of IBM PC

Updated: Sep 30

Lenovo has yet to resolve all its cultural issues. As one global director said, “Until now, I think… [cultural integration] has not been completed…there still remain many cultural problems…I think this part is the most difficult one for the whole acquisition.”1This is an important reminder that the cultural integration process is measured in years, not months.

Regardless, Lenovo truly is an example of a successful cross-border M&A and is regarded as such in academic literature. Through attentive care and cultural awareness, Lenovo has been able to achieve cultural synergy. The current appointed “Chief Diversity Officer,” Yolanda Lee Conyers, is quoted on the company website saying, “We succeed when each of us respects and appreciates the diversity of the individuals we work with. We transcend traditional geographic and cultural borders to better anticipate and serve the complex needs of our customers around the world.”2 This synergy between the companies has been reflected financially. In 2003, Lenovo had income of $129 million3 and a global market share of 2.0%.4 In the same year, IBM PC Division had losses of $258 million5 and a market share of 5.3%.6 By 2016, although Lenovo was struggling with a $128 million loss due to economic fluctuations and restructuring costs, it had captured the largest global market share of the PC industry at 20.7%7 and had earned net income of $829 million the previous year, remarkable growth for what was once considered an underdog company.8


The Lenovo case is very useful for understanding the cultural issues that are central in M&A transactions and what integration looks like in practice. The lessons learned in the Lenovo-IBM acquisition can—and should—be applied to companies pursuing similar endeavors. To successfully prepare for an M&A transaction, further detailed research would be necessary to understand applicable cultural nuances, gain an educated perspective, and prepare to successfully integrate.


Previous: M&A Synergies Framework—The Role of Accounting & Finance in Lenovo’s Acquisition of IBM PC


First in Series: M&A Synergies Framework—Introduction to Lenovo’s Acquisition of IBM PC


Related Content:


Case Study of a Successful M&A—Introduction to Lenovo’s Acquisition of IBM PC This series uses the Mergers and Acquisitions Synergies Framework to explore the careful way Lenovo managed cultural integration with IBM…


Case Study of a Successful M&A—The Role of Management in Lenovo's Acquisition of IBM PC Lenovo recognized that leadership and the decision-making processes of management would contribute to the success or failure of the merger.


Case Study of a Successful M&A—The Role of Behavior in the Lenovo's Acquisition of IBM PC Lenovo made adjustments that influenced the way meetings were organized and conducted, along with other changes, to ensure behavioral/cultural differences…

Footnotes:

#Integration #Environment #Valuation #Communication #Behavior #Lenovo #Acquisition #Computer #Merger #Nationalculture #Culture #Management #IBM #Crossborder #SynergiesFramework #Success #Accounting #Finance #Casestudy

LEARN HERE. GO ANYWHERE.

  • Facebook
  • YouTube
  • Instagram
  • LinkedIn