August 7, 2007 / 3:59 AM / in 10 years

PC makers Lenovo, Acer eyeing Packard Bell: report

SHANGHAI/TAIPEI (Reuters) - Lenovo Group Ltd. (0992.HK), the world’s third-largest maker of personal computers, is battling with its Taiwan rival Acer Inc. (2353.TW) to buy European PC maker Packard Bell BV, a Hong Kong newspaper reported on Tuesday.

Lenovo -- which last week reported a nearly 13-fold surge in quarterly earnings -- would use the acquisition to expand its European business, the Hong Kong Economic Journal said, quoting mainland Chinese media.

Acer said in April that it planned to buy a PC company in three to five months to win more market share and accelerate growth. The company has declined to identify a potential target, saying only that it would not be a U.S. or Taiwan company.

A Lenovo spokeswoman in Hong Kong said the company would not comment on market rumors or speculation. A spokeswoman for Acer had no comment.

Packard Bell said on its Web site it ranks third in the European consumer market for PCs and is expanding into emerging markets in Eastern Europe, the Middle East, Africa and Latin America.

Shares in Lenovo were up 5.17 percent at HK$5.09 by 11:07 p.m. EDT, compared with a 0.78 percent rise in Hong Kong's benchmark Hang Seng Index .HSI, after falling almost 7 percent on Monday.

Shares in Acer were up 1.25 percent, compared with a 0.56 percent gain in Taiwan's TAIEX share index .TWII.

    Lenovo, one of a handful of Chinese firms trying to forge a global brand by investing abroad, dropped to fourth place globally in the first three months of 2007 but has now reclaimed the No. 3 slot from Acer in a closely fought battle, according to data from researchers Gartner and IDC.

    Lenovo held an 8.3 percent share of the worldwide PC market in the second quarter, according to research company IDC. Acer had a 7.2 percent share.

    Europe, the Middle East and Africa made up about one-fifth of Lenovo’s turnover in its last fiscal year. But some analysts have warned that the company’s profitability in Europe is suffering amid intense competition.

    In April, Europe took up 56 percent of Acer’s sales, while the Americas accounted for 23 percent, Asia Pacific 15 percent, China 4 percent and Taiwan 2 percent.

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