Lenovo on Wednesday said that it will acquire Medion AG, a German PC and electronics manufacturer, in a move that will boost its market share in Western Europe.
The PC maker said it will pay 13 euros in cash for Medion. Medion closed at 10.97 euros in Tuesday trading in Frankfurt. Lenovo cut a separate deal with Gerd Brachmann, CEO of Medion. Brachmann will sell 40 percent of Medion's outstanding shares to Lenovo at 13 euros a share and remain a major shareholder with 20 percent.
For Lenovo, the Medion purchase is all about market share. The deal will double its market share in Germany to more than 14 percent. Medion will also make Lenovo a 7.5 percent market share in Western Europe and give the company mobile and consumer PC assets.
In a statement, Lenovo CEO Yang Yuanqing said the Medion purchase complements the company's core business and bolsters its "consumer growth strategy in Western Europe." The companies aim to save on scale, procurement and supply chain efforts.
The Medion deal is expected to close in the third quarter. Lenovo reported solid first quarter earnings last week.
Lenovo's emerging markets strategy paying off