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China’s Lenovo to buy PC firm Medion

The Chinese computer giant Lenovo announced Wednesday it was planning to take over German electronics firm Medion – best known for making low-budget PCs for supermarket chain Aldi – for about €629 million.

China's Lenovo to buy PC firm Medion
Photo: DPA

Lenovo, the world’s fourth-largest computer manufacturer, will pay €13 cash per share, which is a premium of 29 percent on the average closing price for last month.

The aim is a full takeover of Medion with at least 51 percent of the shares. The takeover would mean the Lenovo doubles its share of the German personal computer market and becomes the third-largest manufacturer in the world.

Medion’s founder and current majority shareholder, Gerd Brachmann, has already agreed to sell 40 percent of the company’s shares for 80 percent cash and 20 percent shares in Lenovo. He will keep 20 percent of Medion’s shares.

Lenovo said its offer was dependent on competition regulations being met and a minimum 15 percent acceptance threshold being met – above the 40 percent Brachmann is selling.

The deal means Lenovo will have 14 percent of the German PC market and a 7.5 percent share in the western Europe market. Lenovo acquired the former IBM PC Company Division, which marketed the ThinkPad line of notebook PCs, in 2005 for about $1.75 billion.

“This agreement represents another bold move for Lenovo to realize its long-term strategy,” said Lenovo CEO Yang Yuanqing. “It will complement both Lenovo’s core PC business and new businesses, which are key areas for development.

“With their strong consumer sales, marketing, services and retail capabilities, Medion AG’s business is perfectly aligned with our consumer growth strategy in western Europe. Bringing together this ‘front end’ with Lenovo’s ‘back end’ manufacturing capability and supply chain will make both companies even more successful and competitive.”

He said together the two firms would build an end-to-end consumer platform that would give Lenovo the capability to compete successfully in the “mobile internet” market.

The Local/DAPD/djw

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AMAZON

Germany opens ‘anti-competition’ probe into Amazon with tougher law

Germany's competition authority said Tuesday it had opened an inquiry into online retail giant Amazon over potential "anti-competitive practices", using a new law giving regulators more power to rein in big tech companies.

Germany opens 'anti-competition' probe into Amazon with tougher law
An Amazon warehouse in Brandenburg. Photo: picture alliance/dpa/dpa-Zentralbild | Patrick Pleul

Federal Cartel Office head Andreas Mundt said his office is examining whether Amazon has “an almost unchallengeable position of economic power” and whether it “operates across various markets”.

If so, it would be deemed of “paramount significance”, said Mundt, adding that the regulator could “take early action against and prohibit possible anti-competitive practices by Amazon”.

“This could apply to Amazon with its online marketplaces and many other, above all digital offers,” he added.

Under the amendment to Germany’s competition law passed in January, the watchdog said it now has more power to “intervene earlier and more effectively” against big tech companies, rather than simply punishing them for abuses of their dominant market position.

READ ALSO: ‘I want to know origin of my grapes’: Amazon loses fruit and veg ruling in German court

The German reform coincided with new EU draft legislation unveiled in December aimed at curbing the power of the internet behemoths that could shake up the way Silicon Valley can operate in the 27-nation bloc.

The push to tighten legislation comes as big tech companies are facing increasing scrutiny around the globe, including in the United States, where Google and Facebook are facing antitrust suits.

The Amazon probe is only the second time that Germany’s Federal Cartel Office has made use of its new powers, after first employing them to widen the scope of an investigation into Facebook over its integration of virtual reality headsets.

The watchdog already has two traditional abuse control proceedings open against Amazon.

One involves the company’s use of algorithms to influence the pricing of third-party sellers on Amazon Marketplace, while another is probing the extent to which Amazon and major producers such as Apple exclude third parties from
selling brand products.

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