Lenovo Bids on Packard Bell

Lenovo Group Ltd. on Tuesday announced plans to acquire European electronics maker Packard Bell BV. If it goes through, the deal would be a disappointment for Lenovo rival Acer Inc., which reportedly was also trying to buy Packard Bell.

Lenovo, the world's third largest PC vendor, said in a statement that it has already entered talks with companies and government organizations in preparation for a purchase of 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," said John Hui, 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.

However, in an e-mail exchange Monday, Hui denied he had had any sort of deal with Acer. "I have not entered into any agreements with Acer concerning Packard Bell," he said in the e-mail.

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. Earlier this year, Acer announced plans to acquire a rival in a key growth area, but most analysts assumed a deal would be aimed at China, where Acer lags. The Taiwanese company has a strong presence in Europe, ranking among the top three players in laptop and desktop PCs. Lenovo is further behind, but holds more market share than Acer in the U.S. and China.

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