Lenovo Group Ltd, China's largest PC maker by market share, announced on Wednesday that it intends to double its market share in Germany by acquiring Medion AG, a multimedia and consumer electronics maker.
Medion is one of the top 5 vendors in Germany. Lenovo estimated that after the acquisition, it will be the third-largest PC company in Germany, Europe's largest PC market. It will have more than 14 percent of the German and 7.5 percent of the Western European PC market.
"This agreement represents another bold move in Lenovo's realization of its long-term strategy. It will complement both its core PC business and new businesses, which are key areas for development," said Yang Yuanqing, the company's chief executive officer.
The Chinese PC maker said it hopes that the deal will be completed in August and that it will acquire 50 to 75 percent of the German company's stock.
This agreement is part of Lenovo's worldwide expansion in consumer PCs and the high-growth mobile Internet market by acquisitions. It acquired IBM Corp's personal computer sector in 2004, after achieving sales revenue of $3 billion in 2003 - IBM had $9 billion in sales revenue at that time. After acquiring IBM, Lenovo held 8 percent of the global PC market in 2004, according to the research company, IDC.
In January, Lenovo announced that it had invested $175 million in a joint venture with the Japanese PC maker NEC Corp to expand in the Japanese market. After the purchase, the two held about 26 percent of Japan's PC market.
Last year, Medion had $2.29 billion in sales revenue while Lenovo had $21 billion, almost seven times the figure when it took over IBM.
Lenovo has been trying to increase its presence in Europe, according to Kitty Fok, vice-president of IDC Asia-Pacific. "Lenovo was previously trying to acquire the Western European PC maker Packard Bell, but it ended up being bought by Acer Inc," she told China Daily.
Lenovo was ranked the fourth-largest PC company and held a 9.9 percent market share worldwide in the first quarter of 2011, according to IDC.