Lenovo in talks to buy European computer firm Packard Bell
Lenovo Group, the world's third-largest personal computer maker, aims to expand swiftly into the international consumer market via Europe if it secures the purchase of PC supplier Packard Bell of the Netherlands.
Lenovo and John Hui, the Chinese-American entrepreneur who bought Packard Bell for an undisclosed sum from Japanese electronics firm NEC last year, confirmed yesterday that the Hong Kong-listed company was in talks to take over its smaller, Europe-focused rival.
'It's still early days but we see this acquisition making a big impact for us in western Europe where Packard Bell is strong in the consumer space,' said Deepak Advani, senior vice-president and chief marketing officer at Lenovo.
Packard Bell - the world's No14 personal computer supplier, with a 1 per cent market share in the first quarter, according to market research firm International Data Corp (IDC) - sold about 98 per cent of its products via retailers across Europe and the rest through an online store, company spokesman Hugues Gontier said.
Mr Advani said Lenovo's focus once the deal was completed would be to push the company's new line of consumer desktop and notebook computers, even though Packard Bell also has a solid following in consumer electronics devices.
Half of closely held Packard Bell's product sales worth Euro1.5 billion (HK$16.1 billion) last year consisted of personal computers, with the rest being consumer products.
If the deal goes ahead, it would be another key acquisition for Lenovo, which has been streamlining its operations after acquiring IBM's personal computer division in May 2005.
According to reports, Lenovo's Taiwan-based rival Acer was also seeking to buy Packard Bell.
Venugopal Garre, a research analyst at Credit Suisse, said a successful Lenovo deal 'would be bad news for Acer' due to the resulting boost in a continent where Acer has built strong sales in recent years.
IDC estimates that with Packard Bell, Lenovo's shipments in western Europe could receive an 86 per cent boost against Acer, the No2 vendor in Europe in the first quarter this year.
Both companies declined to provide the potential cost of the deal amid continuing talks. However, reports yesterday cited Cazenove Asia analyst Zhao Xin as estimating the deal could be worth between US$700 million and US$800 million.
