Lenovo today announced the company is in discussions with an independent third party to acquire Packard Bell.
The company has entered into a memorandum of understanding to explore the possibilities of an acquisition.
Lenovo is currently in negotiations in preparation for the acquisition.
In a statement, Lenovo said: "Shareholders of Lenovo and potential investors should note that the proposed acquisition may or may not materialize."
No further details were available.
However, Computerworld understands Lenovo rival Acer is also trying to buy Packard Bell.
Packard Bell did not release a statement, but the company's owner confirmed he was negotiating the deal.
"Lenovo and I have indeed signed a MOU granting them exclusivity to purchase Packard Bell once all regulatories and contract obligations are fulfilled," John Hui said in an e-mail response.
"The (intended) acquisition signifies Lenovo's determination, commitment and longterm planning in entering the PC consumer market after it has successful completed its merger with IBM PC," Hui said.
"Packard Bell will provide Lenovo a spearhead into Europe and a jump start into the PC consumer market."
The Lenovo deal puts the company at odds with rival Acer, the fourth biggest PC vendor.
Chinese language newspapers in Taiwan have reported that Acer has been in talks to buy Packard Bell for months, and an Acer executive that declined to be named confirmed the rumors.
Lenovo and Acer are fighting a tough market share battle in the PC industry, with Acer taking third place overall in the first quarter, but Lenovo regaining the title in the second quarter.
The Chinese vendor accounted for 8.3 percent of global PC shipments in the second quarter, according to market research IDC, while Acer took fourth place with a 7.2 percent share.
Purchasing Packard Bell could tip the scale in favor of Lenovo.
The tie-up would likely help Lenovo more than it would have boosted Acer.
- Sandra Rossi, Dan Nystedt and Ben Ames