Lenovo Group Limited announced that it has signed a Strategic Collaboration Framework Agreement (“Strategic Collaboration”) and a Bond Subscription Agreement (“Investment”) with Alat, a Public Investment Fund (PIF) company focused on transformative technology investment and sustainable manufacturing. The Strategic Collaboration and Investment will enable Lenovo to further accelerate its ongoing transformation, enhance its global presence, increase geographic diversification of its manufacturing footprint, and capitalize on the growth momentum of the IT and Business Services industry in the MEA region. The Strategic Collaboration serves as a strong endorsement of Lenovo’s existing strategy, strong execution, operational excellence, commitment to sustainability, and continuous investment in innovation.
The Strategic Collaboration, alongside a proposed US$2 billion Investment in zero coupon convertible bonds (“Bond Issue”), provides Lenovo with greater financial flexibility to implement its proven strategy, and will further drive its global transformation into a solutions and services-led business. The Strategic Collaboration includes a planned establishment of a regional MEA headquarters in Riyadh, Kingdom of Saudi Arabia (KSA), and a new PC and server manufacturing facility in the Kingdom to serve customers in the region. KSA is entering a new era of clean energy and has a goal to produce 50% of electricity from renewables by 2030. In support of that goal and Lenovo’s own 2050 net-zero target, Lenovo will be able to contribute to this vision and at the same time benefit from KSA’s clean power and sustainable manufacturing initiatives to help reach its own targets. It will also enable Lenovo to enhance its global supply chain resilience and flexibility by adding another location to its existing global footprint, and to serve customers in the MEA region more nimbly.
The MEA region continues to see strong growth momentum fueled by an increasing number of large-cap projects and its strong economies, with the region’s IT and Business Services market size expected to reach close to US$38 billion by 2027, according to IDC estimates. Building on Lenovo’s industry leadership in the MEA region and globally, the partnership with Alat will help Lenovo tap into the robust growth in the region, unlock the transformative potential of digital technologies, and further enhance Lenovo’s position as a global technology powerhouse.
Through this powerful strategic collaboration, Lenovo will have significant resources and financial flexibility to further accelerate our transformation and grow our business by capitalizing on the incredible growth momentum in the MEA region. Looking ahead, Lenovo plans to build a tech & manufacturing hub in Saudi Arabia and will help define the future of the region as a center of innovation which Alat will benefit from. This is a huge vote of confidence in our company, our market leadership, and our future growth potential.
Yuanqing Yang, Chairman and CEO, Lenovo
