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Last Updated: Wednesday, 8 August 2007, 14:19 GMT 15:19 UK
Lenovo has Packard Bell in sights
Lenovo computer
Lenovo wants to build its brand in Europe
Chinese PC manufacturer Lenovo is in talks to buy Dutch counterpart Packard Bell as it looks to strengthen its market position in Europe.

Lenovo said it and an unnamed "third party" were "exploring the possibility" of bidding for Packard Bell.

Experts said Packard Bell, which maintains it is Europe's third-largest PC maker, is worth about $800m (395m).

Lenovo established itself as a global player in 2005 when it bought IBM's PC arm but is relatively weak in Europe.

Lenovo's shares rose more than 2% on the news of the potential deal, which could boost its sales by $2bn.

Japanese firm NEC sold Packard Bell to IT entrepreneur John Hui last year.

Expansion

Although Packard Bell claims third position in the European market, some analysts are sceptical of this, and think it actually ranks either sixth or seventh.

It has struggled in recent years against the likes of US giants of Dell and Hewlett Packard.

Analysts said the deal could be a boost for Lenovo since it has little presence in Europe's consumer PC market, which accounts for about 40% of total computer sales in Europe.

"The acquisition is positive for Lenovo as Packard Bell can help Lenovo penetrate the European consumer segment quickly," said Zhao Xin, from bankers Cazenove.

Lenovo recently reported strong quarterly profits, which jumped from $5.2m to $66.8m in the three months to the end of June.




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