Chinese PC maker Lenovo and Japan's NEC have formed a joint venture to become the largest PC group in Japan.
As part of the agreement, the NEC Lenovo Japan Group will continue individual existing PC operations. Lenovo will have a 51% stake in the joint venture, leaving NEC with a 49% stake.
Lenovo said the partnership provides an opportunity to grow its PC businesses in Japan through stronger market position, product portfolios and distribution channels.
"The agreement with NEC is a perfect fit for our strategy. It reinforces our commitment to our core PC business while, at the same time, providing important new opportunities for growth in Japan," said Yang Yuanqing, CEO at Lenovo.
Nobuhiro Endo, president at NEC, added: "Taking this strategic relationship as a first step, NEC will accelerate expansion of our IT business worldwide."
Experts have said the bigger Lenovo grows, the more aggressively it can compete for customers in the corporate sector to compete with Hewlett-Packard and Dell.
Lenovo held 10.4% of the global PC market for the fourth quarter of 2010, putting it in fourth place behind HP, Dell and Acer, according to figures from researcher IDC.
Lenovo is no stranger to acquisitions, having bought IBM's PC division in 2005.
The transaction is expected to close on 30 June 2011. NEC will receive $175m (£110m) from Lenovo through an issue of Lenovo shares when the transaction is closed.