Lenovo, which acquired IBM's PC business in December, 2004, said the addition of Medion will double its market share in Germany and make it the third-largest PC company in Europe.
The Chinese company, which will spend as much as 465 million euros on the acquisition, also said the acquisition would boost its expansion into consumer PCs and high-growth mobile internet devices.
The move "will complement both Lenovo's core PC business and new businesses which are key areas for development.” Lenovo CEO Yang Yuanqing said in a press release.
The Chinese top executive said Medion's consumer sales, marketing, services and retail capabilities make for a strong fit with Lenovo's supply chain and manufacturing strengths.
Under the terms of the agreement between the two companies, Lenovo will offer 13 euros a share ”“ a 29 pc premium - for all outstanding public shares of Medion. Gerd Brachmann, Medion's CEO, founder and principal shareholder, will sell 40 pc of the German company's shares, while retaining a 20 pc minority stake.
The public offer is conditional on at least 15 percent of freely traded Medion shares not owned by Brachmann being tendered to Lenovo.