Lenovo Group has completed its $1.25-billion acquisition of IBM’s personal computing division, positioning the Chinese company as the No. 3 player in the global PC market.

Lenovo now trails only Dell and Hewlett-Packard, a position formerly occupied by IBM. Lenovo paid IBM $650 million in cash and $600 million in stock. IBM will report a pre-tax gain of $1 billion in its earnings report for the quarter that ends in June.

Lenovo is already the top PC company in China, with one-third of market share. IBM was fifth. The Chinese company expects annual revenue of $13 billion on shipments of 14 million units.

“We expect to capture synergies today through leveraging the complementary nature of Lenovo and [IBM’s] customer bases, product offerings, and geographic coverage while utilizing Lenovo’s highly sophisticated operating platforms,” said Lenovo CEO Stephen M. Ward, formerly general manager of IBM’s personal systems division.

IBM shares rose $0.71 to $77.09 in recent trading. Lenovo’s stock fell about $0.03 to $2.43 on the Hong Kong Exchange.

Despite gains in revenue and market share, Lenovo will have to turn around the PC division, which took in about $10 billion in revenue last year but generated losses of nearly $1 billion between 2001 and mid-2004. In the quarter that ended in March, IBM’s hardware sales fell 2 percent on a currency-adjusted basis to $6.7 billion.