Lenovo Group and Alat Enet of Saudi Arabia reached a strategic cooperation of $2 billion.

[Global Network Technology Comprehensive Report] On May 29, 2024, Lenovo Group announced today that it has reached an important strategic cooperation with Alat Enette, a subsidiary of Saudi Arabia Public Investment Fund (PIF). According to the agreement, Alat Enette will provide Lenovo with $2 billion interest-free convertible bond investment to support its global business development and innovation strategy.

This cooperation involves not only capital investment, but also the establishment of Lenovo’s regional headquarters in the Middle East and Africa markets in Riyadh, Saudi Arabia. The headquarters will include a customer service center and a research and development center for the region, aiming to better serve the local market and promote scientific and technological innovation. At the same time, Lenovo also plans to build a new PC and server manufacturing base in Saudi Arabia to strengthen its global manufacturing layout.

PIF, as the world’s leading sovereign wealth fund, has an asset management scale of more than 700 billion US dollars, which is an important force to promote the implementation of Saudi Arabia’s national strategy "Vision 2030" plan. Alat Enet, a wholly-owned subsidiary, focuses on transformative technology investment and sustainable manufacturing, and is committed to promoting Saudi Arabia to become a global manufacturing center for sustainable technologies through cooperation with global benchmarking companies.

This strategic cooperation is regarded as recognition of Lenovo’s established strategy, strong execution, excellent operational capability and commitment to continuous investment and innovation. This investment will provide greater financial flexibility for Lenovo’s intelligent transformation strategy, accelerate its transformation process, and further enhance its position in the global diversified manufacturing field.

With the rapid growth of digital economy in the Middle East and Africa, the cooperation between Lenovo Group and Alat Enette is expected to release the great potential of digital technology to drive change in this region. According to the forecast of market research institute IDC, the market size of information technology and enterprise services in the Middle East and Africa is expected to reach nearly $38 billion in 2027.

Yang Yuanqing, Chairman and CEO of Lenovo Group, said: "This cooperation will provide us with more resources and financial flexibility to accelerate the transformation and expand our business and seize the huge growth opportunities in the Middle East and Africa. We plan to build a new technology and manufacturing base in Saudi Arabia to help the region develop into a future innovation center. "

Amit Midha, CEO of Alat Enette, also said that they are honored to be a strategic investor of Lenovo Group and look forward to seeing Lenovo Group further release its potential in the Middle East and Africa.

According to the bond subscription agreement reached between the two parties, Lenovo Group will issue a convertible bond of US$ 2 billion, which will expire in three years and have the opportunity to be converted into equity at the initial conversion price of HK$ 10.42 per share. In addition, Lenovo also proposed to issue 1.15 billion warrants to raise additional funds to support future growth.

In this transaction, a number of well-known institutions provided consulting services for both parties to ensure the smooth progress of cooperation.