Lenovo goes shopping for PC makers

Lenovo is in discussions with third parties about acquisitions and investment opportunities, the company said on Wednesday.

Lenovo is in talks to acquire PC makers, a sign that it is taking advantage of a stagnant market to expand its worldwide presence.

The company is in discussions with third parties about acquisitions and investment opportunities, said Yang Yuanqing, Lenovo chairman, in a statement dated Wednesday and published on IBM's Web site.

Without naming companies, Yang said there was no assurance that any deal would be reached. A company spokesperson declined further comment.

One company Lenovo is talking to is Fujitsu, which may sell off its Fujitsu-Siemens retail PC operations in Europe, various U.S. media outlets reported on Thursday.

Fujitsu declined to comment on whether it was in talks with Lenovo, but it is looking to exit the market of "low-value PC product lines," said Kazuhiko Kato, chief financial officer at Fujitsu, in a statement sent to the IDG News Service on Thursday. It is aiming to reduce headcount at Fujitsu Siemens Computers in Germany by about 12 per cent due to the "current economic situation and the continuously shrinking IT market in Europe," Kato said.

Many scenarios for realigning the PC portfolio are under consideration, Kato said, adding that the company has no intention of exiting the PC business entirely.

The acquisition of Fujitsu-Siemens could give Lenovo a quick entry to the large Western European market, said Richard Shim, research manager at IDC.

Fujitsu-Siemens is one of the top-five PC vendors, and Lenovo's past attempts to crack into the European market have not borne fruit, Shim said. Lenovo tried in 2007 to acquire European PC vendor Packard Bell, which was ultimately bought by Acer.

Lenovo is also rumored to be competing with Dell to try to acquire Brazilian PC maker Positivo Informatica, according to media reports from Brazil. Positivo Informatica claims to be one of the top PC makers in Brazil with a 13.2 per cent share of PC units shipped in the third quarter of 2008.

A Positivo spokesman in Brazil declined comment on companies bidding to acquire its PC operations, but the company issued a statement saying that it will consider proposals that are beneficial to its shareholders. Lenovo and Dell spokespeople declined comment on the "speculation."

Worldwide PC shipments have dropped due to the economic downturn and a slowdown in spending by customers. Analysts have predicted industry consolidation as a consequence.

PC shipments worldwide are expected to grow by only 3.8 per cent in 2009, a drop from the 13.7 per cent growth IDC had predicted earlier this year. Shipments could start picking up by late 2009 or 2010, IDC's Shim said.

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Agam Shah

IDG News Service
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