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Fujitsu in PC merger talks with Lenovo

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Japan’s Fujitsu is in merger talks with Chinese computer giant Lenovo

TOKYO, Japan, Oct 27 – Japan’s Fujitsu said on Thursday it was in talks to merge its struggling PC business with Chinese computer giant Lenovo, sending its shares soaring as the company also announced a recovery in profits.

The talks come as Japanese personal computer makers work to scale back their businesses as consumers shift to smartphones and tablets.

Tokyo-based Fujitsu said it and Lenovo, the world’s largest PC maker, are “exploring a strategic cooperation in the realm of research, development, design and manufacturing of personal computers for the global market”.

The two firms, which are yet to reach an agreement, are also talking with government-backed Development Bank of Japan for financial and strategic support.

Fujitsu shares rose by 7.8 percent on news of the merger negotiations to close at 599.3 yen.

In a separate announcement, the company said its net profit for the six months to September came to 11.8 billion yen ($113 million).

The recovery marks a reversal from a net loss of 15.9 billion yen during the same period last year, thanks to cost-cutting efforts particularly in the PC and mobile phone operations.

Operating profit stood at 25.9 billion yen, up from an operating loss of 12.4 billion yen the year before, while sales fell 7.0 percent to 2.08 trillion yen.

Fujitsu also slightly revised down its annual sales forecast to 4.5 trillion yen, 100 billion yen lower than an earlier forecast due to revised exchange rate assumptions, but kept annual net profit projection at 85 billion yen.

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