Lenovo is looking to boost its market share in western Europe, and today announced it will be acquiring German multimedia and consumer electronics firm Medion in a pair of deals totaling over $670 million. The move instantly doubles Lenovo’s market share in Germany—Europe’s largest PC market—to a 14 percent share, and brings Lenovo’s share of the broader European market to about 7.5 percent.
“This agreement represents another bold move for Lenovo to realize its long-term strategy,” said Lenovo CEO Yang Yuanqing, in a statement. “With their strong consumer sales, marketing, services, and retail capabilities, Medion AG’s business is perfectly aligned with our consumer growth strategy in Western Europe.”
Lenovo will be paying €13 per share for Medion, and is cutting a separate deal with Medion CEO Gerd Brachman, who has agreed to sell 40 percent of Medion’s outstanding shares to Lenovo at €13 per share, while retaining a 20 percent stake.
The Medion acquisition marks Lenovo’s biggest takeover since it bought IBM’s personal computer business back in 2005 for about $1.75 billion. It also mark’s a success in Lenovo’s long-standing effort to get deeper into the European market; back in 2007, Lenovo was keen to acquire Packard-Bell—which, believe it or not, was still something of a force in the European PC market. However, the move was thwarted by Acer’s sly acquisition of Gateway, which not only gave Acer a significant channel into the North American computer market but also gave it right of refusal on any Packard-Bell acquisition deal—and, of course, Acer didn’t let Lenovo buy the company.
In addition to a larger share of the European computer market, Lenovo’s acquisition of Medion also gives it a hand in the company’s multimedia and mobile businesses. Medion is based in Essen, and has about 1,000 employees.