Lenovo has made an offer to acquire a majority stake in Germany based PC maker Medion for $671 million.
According to a report on Business Week (opens in new tab), the Chinese computer maker has offered to acquire a 37 percent stake from Medion’s chairman Gerd Brachmann for 13 Euros a share in stock and cash.
The company also plans to extend a similar offer to other existing shareholders while the Chairman is expected to hold 18 percent stake in the company after the deal, Lenovo said.
The deal will allow Lenovo to better compete with rivals HP, Acer and Dell in western markets. According the BW article, the acquisition will make Lenovo bigger than Apple in terms of PC sales in Western Europe. The company has been trying to make its mark in the European consumer PC market but has had little success so far.
Medion, whose shares jumped by almost 20 percent in Frankfurt trading after Lenovo made its announcement, sells most of its PCs in Germany but has also made considerable progress in consumer PC market in Belgium and Austria.
“I don’t see the possibility that Lenovo would raise the offer. There just wasn’t more to get out of them.” Medion Chief Financial Officer Christian Eigen, who plans to sell his 75,000 shares to Lenovo, said in an interview over the phone.