Wednesday, 8 August 2007

Lenovo May Buy Packard Bell to Spruce European Sales

Chinese computer maker, Lenovo may buy Europe’s third largest computer maker Packard Bell NV in order to boost its European sales and revenues...

Chinese computer maker, Lenovo may buy Europe’s third largest computer maker Packard Bell NV in order to boost its European sales and revenues.

Lenovo is an insignificant player in the highly competitive European market and has just barely made profits selling in European. If it actually acquires Packard bell, it it will catapult it into top three computer brands in Europe.

Lenovo is the world’s third largest computer maker just after HP and Dell. Lenovo was actually unknown outside China when it acquired IBM’s computer hardware business in 2005 that made it household name banking on IBM’s reputation.

The deal with Packard Bell, which controls two per cent of the global market, would be worth around USD 800 million.

If successful, the deal would allow the Chinese computer company to quickly gain market share in Europe where it is ranked sixth and is barely profitable. But it could expose the firm to an intense battle for consumers with the likes of Dell Inc., Hewlett Packard and Acer Inc., its Asian rival which is giving it a tough fight in Asia.

Packard Bell was once a leading PC vendor in the United States but withdrew from the world's largest PC market in 1999 to focus on Europe amidst heavy competition from Compaq, and HP. At one time Packard Bell even threatened IBM’s domination in the US.