The first positive news of the new year! LENOVO GROUP (00992) has completed a $2 billion investment with the Saudi sovereign wealth fund and reached a strategic cooperation agreement.

On January 8th, the global technology leader LENOVO GROUP (00992) and Alat Enait, a company under the Saudi Arabian Public Investment Fund (PIF), announced today that they have completed a 3-year $2 billion interest-free convertible bond investment and reached a strategic cooperation agreement previously announced in May 2024. The transaction has received approval from shareholders and all necessary regulatory authorities. This means that the two parties are officially joining hands to open a new chapter in the Middle East and Africa region, with LENOVO GROUP's Middle East market business expected to further accelerate in 2025, enhancing global influence, strengthening its global manufacturing footprint, and accelerating business transformation. After the completion of the transaction, the two parties will leverage their respective strengths to jointly expand in local and regional markets. LENOVO GROUP, building on its existing business in the Middle East and Africa region, will introduce its leading global supply chain, technology, and manufacturing capabilities into Saudi Arabia, helping to create thousands of jobs. Alat Enait's extensive local network and market insights will support Lenovo in accelerating market expansion, reaching local customers accurately, and continuously improving business performance and market competitiveness. According to IDC, the information technology and enterprise services market in the Middle East and Africa region is expected to reach nearly $38 billion by 2027, providing significant revenue and profit growth opportunities for LENOVO GROUP. Next, LENOVO GROUP will establish its Middle East and Africa headquarters in Riyadh, the capital of Saudi Arabia, and build a sustainable manufacturing base in the country to serve customers in the region and globally. The manufacturing base will leverage local R&D teams to create end-to-end "Saudi-made" products. The new factory is expected to start production in 2026, with an annual output of millions of personal computers and servers, becoming an important part of Lenovo's global manufacturing network covering more than 30 markets in Argentina, Brazil, China, Germany, Hungary, India, Japan, Mexico, and the United States. Additionally, LENOVO GROUP and Alat Enait have also reached a business expansion agreement, including investment in flagship retail stores in Saudi Arabia, as well as further increasing investment in research and development, marketing, and strategic cooperation in the Middle East and Africa region. Yang Yuanqing, Chairman and CEO of LENOVO GROUP, said, This strong strategic cooperation and investment will provide Lenovo with more resources and greater financial flexibility to fully seize the tremendous growth opportunities in Saudi Arabia, the Middle East, and Africa, thereby accelerating transformation and expanding our business. We are very pleased to become long-term strategic partners with Alat Enait. With Lenovo's leading global supply chain, innovative technology, and strong manufacturing capabilities, Lenovo will help Saudi Arabia realize its vision for economic diversification, industrial development, technological innovation, and job growth by 2030. Amit Midha, CEO of Alat Enait, said, We are honored to be strategic investors of LENOVO GROUP, partnering with them to help maintain their leading position in the global technology industry. With Lenovo establishing its regional headquarters in Riyadh and building a world-class manufacturing base in Saudi Arabia driven by clean energy, we look forward to seeing Lenovo further unleash its potential in the Middle East and Africa region. In May 2024, when LENOVO GROUP announced its strategic cooperation and investment plan with Alat Enait, they also announced a plan to issue 1.15 billion subscription warrants for a period of 3 years to raise additional funds to support future growth and expand their capital base. Currently, all warrants have been subscribed, including 43% subscribed by Lenovo management, demonstrating confidence in LENOVO GROUP's continued strategic transformation, global market leadership, and business growth momentum. In this transaction, Citigroup and Gallant (Hong Kong) acted as advisors for LENOVO GROUP, while Morgan Stanley and Risheng International Law Firm acted as advisors for Alat Enait.