UPDATE 1-Sanmina to sell PC business to Taiwan's Hon Hai

(Adds analyst comments, Lenovo quote, stock prices)

By Doug Young and Sheena Lee

TAIPEI, Feb 20 (Reuters) - Electronics maker Sanmina-SCI Corp (SANM.O: Quote, Profile, Research, Stock Buzz) said it will sell part of its PC business to a unit of Hon Hai Precision Industry (2317.TW: Quote, Profile, Research, Stock Buzz), Taiwan's top electronics maker, in a deal worth up to $90 million.

Sanmina said it had signed a definitive agreement with Hon Hai's Foxteq Holdings to sell certain assets of its personal computing business and associated logistics services located in Hungary, Mexico and the United States, according to a statement released on Tuesday in the United States.

As part of that move, Sanmina said it had also entered into a non-binding agreement with China's Lenovo (0992.HK: Quote, Profile, Research, Stock Buzz), the world's fourth-biggest PC seller, to transfer responsibility of Sanmina's Monterrey, Mexico, personal computing operation and to sell certain of its related assets to Lenovo.

Analysts and investors were upbeat on the deal for Hon Hai and its shares were up 0.57 percent at 0433 GMT, outperforming Taiwan's benchmark TAIEX index , which dropped 1.39 percent.

"The acquisition could increase Hon Hai's annual revenue by $3 billion, or 4.8 percent, and should offer a better outlook for top-line growth and a slightly better earnings outlook," said CLSA analyst Vincent Chen.

Hon Hai did not disclose a price in its own statement but said it expected the deal to be complete by the end of June.

Lenovo confirmed that it had signed a non-binding memorandum of understanding to purchase certain assets of Sanmina's PC operations in Mexico but that no final agreement had yet been concluded.