Lenovo to swallow German PC giant
Largest deal since IBM PC biz borging
Chinese PC maker Lenovo has agreed to acquire German consumer electronics and PC manufacturer Medion in a move that it says will double its market share in Germany, making it the third-largest PC company in that country.
"This agreement represents another bold move for Lenovo to realize its long-term strategy," said Lenovo chief executive Yang Yuanqing in a statement announcing the deal. "It will complement both Lenovo's core PC business and new businesses which are key areas for development."
The €629.4m ($920m) deal will be Lenovo's largest since its $1.75bn acquisition of IBM's PC business in 2005 – although that deal would now be worth over $2bn in 2001 dollars, making the Medion buy less than half the size of that 2005 blockbuster.
Still, at nearly $1bn, the Medion acquisition is not what anyone would call small potatoes.
According to Lenovo, the deal will result in the combined company controlling over 14 per cent of the German PC market, and having a Western European PC market share of about 7.4 per cent.
Lenovo is growing fast. According to the company – which last week announced 2010-2011 revenues of over $21BN – it is "delivering growth in every region, every segment and every product line." During that period, they report, the company grew 28.2 per cent while the worldwide PC market grew 7.4 per cent.
In "the near term", Lenovo reports, both companies will maintain their individual product brands, sales and support channels, customer service, product delivery, and warranty services. It will be "business as usual" after the acquisition, they claim.
The deal is expected to close in the third quarter of this year. ®