Lenovo has been a recognized name in the global technological world for more than a decade now. This Chinese computer making company has proved its proficiency and gained a name along with other brands like Apple, HP, Sony and Toshiba. With the acquisition of Medion AG, a company listed in the stockmarket, with its headquarters in Essen, Germany, Lenovo has proved itself again to be the force to reckon with.
This move from Lenovo will ensure its marketshare increases in the entire Western Europe, along with providing them with double the present marketshare in Germany itself. Infact, this acquisition makes Lenovo the third largest company in Germany when it comes to PC.
Medion AG is a company with about 1000 employees and is listed with the stock exchange. The company's ambition was towards production of top notch, fashionable and creatively made consumer electronics. They wanted to reach the common man. For this, apart from conventional marketing tactics, Medion AG adopted development and advertising complimentary services in the field of telecom. One could go onto their site and check out the mobile services, downloads facility and other online services.
With this acquisition, both Lenovo and Medion plan to continue their currently running operations. This is inclusive of regular customer service, delivery of products and fulfillment of warranties. It is going to be business as usual despite the fact that Lenovo would be a part in making management decisions. Lenovo, in the meanwhile continues to sell its own brand products along with the sales and support team of Medion's exisiting channels.
It has come to news that Lenovo and Medion AG management approved wholeheartedly of the deal, with customary closing terms. These terms include participation of minimum level in the public issue along with regulated approvals needed. This public issue should be expected around August 2011. Barclay Capital has been announced as the only financial advisor in this transaction.
As per the Lenovo chief executive, Yang Yuanquing, this is simply another move from Lenovo towards the fulfillment of its long term ambitions. With this move, the PC production as well as key to new businesses can be opened up in Wetern Europe. It is known to be the deal that is only the largest since the deal that got them IBM's PC manufacturing unit in 2005.
This transaction is supposed to achieve the company control of above 14% of the German computer market and a total 7.4% of the entire Western European market. That is by no means a small feat. Lenovo recently announced its 2010-2011 profits at about twenty one billion dollars, with the company growth of 28.2% annually. It is interesting to note that the global growth of the computer electronics industry had been only 7.4%
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