Chinese computer maker Lenovo Group has agreed to buy Germany’s Medion AG in a deal valuing the electronics retailer at up to $900 million, to boost its marketshare in Europe. Lenovo will pay up to $666 million for the deal. The acquisition, Lenovo’s biggest since its purchase of IBM's PC busines s six years ago, comes four months after Lenovo signed a joint venture deal with NEC Corp to sell laptops in Japan.
The deal will double market share to more than 14% of the PC market in Germany and give the combined company a share of about 7.5% in the western European PC market, Lenovo said on Wednesday.
At the same time, larger rival Acer, the world’s number two PC maker, said it will take a $150 million charge to write down excessive inventory and cover potential accounts receivable problems in Europe, and will also lay off 300 staff.
The two companies agreed that no jobs would be cut or sites shut down as a result of the takeover, and Medion's management will remain in place.
Lenovo will pay €231 million, or €13 per share, to Medion's biggest shareholder Brachmann for a 36.6% stake. Brachmann owns almost 55% and will keep about 20% of the shares. CFO Eigen, who holds 75,000 shares, has also agreed to divest his stake, and Lenovo will make a conditional offer to other shareholders.