Lenovo Group Ltd, the world's third-largest PC maker, is trying
to acquire Europe's Packard Bell BV to bolster its global
expansion.
The Hong Kong-listed company said in a statement that "it has
entered into a memorandum of understanding with an independent
third party to explore the possibilities of the proposed
acquisition".
The company did not reveal details of the possible deal.
If it goes through, the deal would be Lenovo's second overseas
foray after its acquisition of IBM's PC division two years ago.
"The deal could give Lenovo a strong foothold in Europe," said
Simon Ye, an analyst with Gartner, a leading consultancy on IT and
communications. "Lenovo has a good niche in China and the US now,
but its presence in Europe has been very weak."
In its first fiscal quarter of this year ending in July,
Lenovo's revenue from Europe, Middle East and Africa totaled the
US$755 million. This region accounted for 19 percent of the
company's total income during the period.
Packard Bell earned 1.5 billion euros in revenue last year and
claimed to be the fourth-largest PC maker in Europe. It quadrupled
its customers to more than 5 million between 2003 and 2005 and has
maintained a sales growth of more than 10 percent for three
years.
"Packard Bell has a good distribution channel and client base in
Europe, which Lenovo lacks," said Ye. "Moreover, the company has
good product research and development capacity, especially in the
individual user market."
Lenovo's PCs mainly cater for corporate clients in Europe. But
the consumer PC market has enjoyed a much higher growth in recent
years as incomes rise.
The deal would help Lenovo overtake Fujitsu Siemens Computers
Holding BV as the fourth-largest vendor in Western Europe,
according to estimates by research firm IDC.
"It would be much easier for Lenovo to integrate the two
companies' business this time," said Ye. "The company has had
enough relevant experience from its acquisition of IBM's PC
arm."
(China Daily August 9, 2007)
