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Lenovo forks out for German PC builder Medion

Alex Scroxton

Budget German PC builder Medion has been acquired by Lenovo in a deal valuing the firm at €629.4m (£554.1m), doubling its local market share and handing the Chinese firm around 7.5 per cent of the PC market in western Europe, according to IDC.

Medion, which made sales of around €1.6bn last year, has had a stronger British presence in the past but now tends to sell into the UK sporadically and on an opportunistic basis, according to Gartner research director Ranjit Atwal.

"Most retailers have established brands, but every now and then they will take another, such as Medion, usually based on price," he said.

Atwal said the deal was a strange one for a PC company to make - Medion has a more sizeable consumer electronics business - but added there were few other viable targets.

The addition of a sizeable consumer PC business to Lenovo's arsenal could in theory complement its enterprise-slanted business nicely, but the consumer market remains mired in the doldrums, and an upswing is not widely expected this year.

Lenovo Mature Markets Group president Milko van Duijl said the agreement would "accelerate our penetration into the consumer market in western Europe, and provides additional growth opportunities leveraging Medion's knowledge of the retail market".

Lenovo has already acquired 40 per cent of outstanding shares in Medion from founder and CEO Gerd Brachmann, and will commence a public offer for all outstanding public shares, which should close during the third quarter.

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