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IBM, Lehman Brothers to invest $180M in China

Posted: 02 Nov 2006 ?? ?Print Version ?Bookmark and Share

Keywords:IBM? Lehman Brothers? nanotechnology? nanotech?

IBM and investment firm Lehman Brothers will allocate an initial capital of $180 million in the China Investment Fund to drive financial and business transformation for enterprises in the region.

"IBM has been working as an innovation partner to Chinese companies and the Chinese government for a long time," said Henry Chow, chairman and CEO of IBM greater China group. "This Fund is an opportunity for us to utilize our experience in China and, as a globally integrated company along with Lehman Brothers' investment management expertise, help facilitate the government's objectives of transforming China's enterprises."

In their first alliance, each company will initially provide $90 million. According to IBM's announcement, the fund will support the China central government's policy, encouraging companies to be innovative in business practices and management as well as in information technology and product development.

Michael Odrich, Lehman Brothers' global head of private equity, said that both companies are highly committed to China and are excited about the investment opportunities the fund will provide in China's dynamic market. The fund will offer businesses in the region access to investment capital as well as best practice technology and business strategies from IBM and Lehman.

The two companies will focus on mid-stage to mature, public or private China companies across various industry sectors. They will provide management and technology expertise to the companies, enabling those companies to keep pace with the quickly evolving China market.

In 2005, China's GDP ranked fourth in the world. With its economy expected to grow 7.5 percent per year over the next five years, China is expected to rank third, behind the United States and Japan, by 2010.

China's 11th five-year blue print covering 2006-2010 encourages a company rather than government-driven innovation system. It focuses on optimizing and upgrading traditional industries while developing high-tech industries such as information technology, communications, next generation networks, nanotechnology, biotechnology and an IT services sector.

IBM first entered China in 1934 and returned in 1979. It has established one of its eight research labs in China. In the last 18 months, IBM has established partnerships with more than 250 VC-backed start-ups in China.

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