PIF’s Alat, Lenovo forge $2bn partnership to establish manufacturing hub in Saudi Arabia

Saudi Arabia’s pursuit of a sustainable manufacturing hub gains momentum as Alat partners with Lenovo Group to establish a facility and invest $2 billion through zero-coupon convertible bonds.

As part of the agreement, the Chinese firm will set up a regional headquarters in Riyadh for the Middle East and Africa region, along with a new manufacturing hub in the Kingdom, to supplement its existing 30-plus production sites worldwide. The facility will prioritize smart, sustainable manufacturing and will initially cater to customers in the MEA region.

The Public Investment Fund-owned firm’s investment in Lenovo will be in the form of a bond subscription agreement, with the electronics giant issuing $2 billion in convertible bonds.

Amit Midha, CEO of Alat, said: “We are incredibly proud to become a strategic investor in Lenovo and partner with them on their continued journey as a leading global technology company.”

He added: “With the establishment of a regional headquarters in Riyadh and a world class manufacturing hub, powered by clean energy, in the Kingdom of Saudi Arabia, we expect the Lenovo team to further their potential across the MEA region.”

This move aligns with the Saudi firm’s commitment to Vision 2030, supporting environmentally-conscious production powered by clean energy, creating new jobs in the industrial and electronics sectors, and capitalizing on regional economic growth opportunities.

Through this investment, Alat anticipates creating 15,000 direct and 45,000 indirect jobs in Saudi Arabia, generating a cumulative gross domestic investment impact of $10 billion by 2030.

Lenovo’s convertible bonds will be due three years after issuance and will convert to equity upon maturity at an initial conversion price of 10.42 Hong Kong dollars ($1.33) per share.

“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,” said Yuanqing Yang, chairman and CEO of Lenovo.

He added: “Looking ahead, Lenovo plans to build a tech and 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.”

Moreover, the partnership between Alat and Lenovo aims to harness the transformative potential of digital technologies while establishing the region as a global innovation hub.

This collaboration is expected to significantly impact the region’s journey toward a diversified, resilient, and technologically advanced future.

Launched in February by Crown Prince Mohammed bin Salman, Alat aims to position Saudi Arabia as a global center for sustainable technology manufacturing, focusing on advanced technologies and electronics.