Lenovo pursues Medion for consumer PC glory

€465m move designed to increase vendor's penetration of western European consumer market

PC vendor Lenovo has tabled an offer for German consumer electronics giant Medion in a bid to bolster its fledgling European consumer business.

Lenovo said the move, worth up to €465m (£409m), would boost its share of the German and western European PC markets to 14 per cent and 7.5 per cent respectively.

The China-based vendor has struggled to gain traction in the European consumer space and the Medion acquisition, which is set to close in Q3, is also designed to address that.

Milko van Duijl, president of Lenovo Mature Markets Group, said: "This agreement with Medion accelerates our penetration into the consumer market in western Europe and the German market specifically, and provides additional growth opportunities leveraging Medion knowledge of the retail market in western Europe."

According to Gartner, Lenovo's share of the western European consumer PC market is still languishing at about one per cent.

Gartner research director Ranjit Atwal said Medion would barely affect its consumer penetration outside of Germany, noting that the firm's UK retail presence is limited to an "opportunistic" relationship with Dixons.

"The worrying thing for Lenovo is it has not been able to gain a foothold on its own and this will not give it a pan-European view," he told ChannelWeb. "Medion has retracted in most European countries except for Germany."

Lenovo entered into talks to buy pan-European consumer PC outfit Packard Bell in 2007 but eventually lost out to rival Acer.

Atwal said its offer for Medion suggested it may now have settled on a country-by-country approach to acquisitions.