IBM (IBM) and Lehman Brothers (LEH) are together investing in China's Kingdee.

Xu Shaochun, chairman of Kingdee, said, "Until now, Kingdee and IBM have already enjoyed almost ten years of collaboration. During this time, Kingdee has benefited greatly from IBM's leading technology expertise and comprehensive business experience. As we seek enough capital to grow, this collaboration with the ‘China Investment Fund' business alliance has further strengthened our relationship with IBM and added a new relationship with Lehman Brothers. We believe that this collaboration will bring more opportunities for us, adding value to our business and helping us to be more competitive in the global market."

Following completion of the investment, IBM and Lehman Brothers will each become a shareholder of approximately 3.85% of the issued share capital of Kingdee. IBM and Kingdee International will also form a global alliance to enhance the competitiveness of their clients in China and global markets, and help Kingdee International to become an international company and truly global software provider.

In October 2006, IBM and Lehman Brothers entered into an offshore business alliance with the aim to jointly invest in Chinese enterprises. This business alliance has been described and branded as the "China Investment Fund". As the first major investment by this alliance, the Kingdee transaction represents a cooperative initiative by IBM and Lehman Brothers to help domestic Chinese enterprises develop their management capabilities and grow into world-class corporations.

Since the formation of this business alliance last year, the "China Investment Fund" business alliance has focused on public and private, mid-stage and mature Chinese companies across various industry sectors. IBM and Lehman Brothers aim to help these Chinese companies expand their business and management capabilities by leveraging IBM's business and operational insights and technology leadership in China, and Lehman Brothers' global investment banking and private equity expertise and capability. As a leading ERP and E-Commerce solutions provider in the China market, Kingdee has developed into one of the fastest growing ISVs in the global software market. IBM and Lehman Brothers believe that this investment will also be a catalyst for the development of China's local software industry.

Kingdee International and IBM also signed a MOU on global collaboration, mainly on various aspects like globalization and SOA, marketing, consultation and application management services, and Software as a Service.


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