Lenovo Group said it planned to accelerate its expansion in Europe after securing a deal for Germany's Medion, which makes personal computers and consumer electronics products and also provides mobile communications services.
The Chinese computer giant has made a conditional offer to acquire a controlling stake in Medion for up to Euro466 million (HK$5.2 billion) to Medion shareholders, who are led by founder and chief executive Gerd Brachmann.
Wong Wai-ming (pictured), Lenovo's chief financial officer, yesterday said that as part of the total transaction, the company would pay Euro231 million, 80 per cent of which would be in cash and the rest in Lenovo shares, to Brachmann under a separate agreement.
Lenovo's offer to the remaining shareholders of Medion was at Euro13 per share in cash.
The deal is expected to close this August and give Lenovo between 55 per cent and 80 per cent stake in Frankfurt-listed Medion. If completed, the transaction would be Lenovo's second-largest acquisition after it closed the US$1.75 billion purchase of IBM's personal computer business on May 1, 2005.
Lenovo and Medion will continue to maintain their own product brands, while providing sales and support through existing channels.
Wong said the combined company would have more than a 14 per cent share in the German personal computer market and about a 7.5 per cent share in western Europe.
