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Lenovo expands into Europe

Lenovo expands into Europe
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China’s Lenovo is buying the German consumer electronics retailer and computer maker Medion to try to expand its market share in developed economies.

It is Lenovo’s biggest acquisition since it bought IBM’s PC business six years ago.

Lenovo is keen to further expand outside of its core market China, but analysts questioned whether there is enough sales potential in mature markets like Germany.

Last year Lenovo – which is focused on China and emerging markets – was the world’s fourth largest personal computer brand with almost 10 percent of market share, behind Dell of the US and Taiwan’s Acer. Another American company, Hewlett Packard was number one, with almost 18 percent.

Razor-thin profit margins have forced PC makers to look to acquisitions and alliances with rivals.

Lenovo and Medion combined will sell over 14 percent of the PCs in Germany and will have 7.5 percent of market share in Western Europe.

At the same time, Acer said it will take a 100 million euro charge to write off inventory and payments it does not expect to get and will cut 300 jobs in Europe.