The acquisition would help Lenovo grow its consumer PC market share in Western Europe, and the German market specifically, the company said in a statement.
Lenovo has been trying to break into the consumer space in Europe, but has had little success, according to Eszter Morvay, research manager for IDC's European Personal Computing group.
Medion, the last pan-European PC maker, sells over 60% of its PCs in Germany, but has also made a mark in countries such as Austria and Belgium, according to Morvay.
During the first three months of 2011, Medion had a 4% share of the consumer market in Western Europe, compared to only 0.5% for Lenovo, Morvay said.
Lenovo is offering €13 ($18.70) in cash per Medion share, a 29% premium over the average closing price for the previous 30 days.
The offer values Medion at €629.4 million. The deal will only go ahead if the holders of at least 15% of publicly traded Medion shares accept. That would be sufficient to give Lenovo a majority stake in the company, as Medion founder and CEO Gerd Brachmann has already agreed to sell two-thirds of his 60% stake in the company to Lenovo for €13 per share, 80% of it in cash and 20% in Lenovo shares.
This isn't the first time Lenovo has tried to buy a European PC maker: A few years ago, it also made a play for Packard-Bell, but lost out to Acer.
Reprinted with permission from IDG.net. Story copyright 2010 International Data Group. All rights reserved.
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