Lenovo in talks to acquire Fujitsu's PC business

After gorging on the PC businesses of IBM, NEC and Medion, Lenovo sets its sights on Fujitsu

Lenovo is in talks to acquire a controlling stake in the PC business of Japan's Fujitsu.

The Japanese hardware vendor has confirmed reports, published this morning, that the two companies are planning to form a joint venture, with Lenovo taking a majority, controlling stake. However, the two companies are currently haggling over prices.

News of the deal follows the collapse earlier this year of a proposal by Fujitsu, Sony and Toshiba to merge their respective PC businesses.

For Fujitsu, the deal is an opportunity to discard a struggling business, while Lenovo will enjoy even greater economies of scale in a sector in which it had a global market share of 20.7 per cent in 2015, according to analysts IDC, while Fujitsu's was less than two per cent.

Fujitsu acquired the PC business of the UK's ICL when it took full control of the company in the mid-1990s. Under CEO Peter Bonfield, one of ICL's strategies involved expanding in the-then hot PC market.

However, even after its 1991 acquisition of Nokia's PC unit, Nokia Data, ICL struggled to achieve the margins necessary to turn a decent profit in PCs. Fujitsu subsequently took control of the company in 1990.

Fujitsu, in turn, has been squeezed in recent years due to a combination of a declining PC market and vigorous price competition from companies like Lenovo.

In 1999, Fujitsu merged its PC business outside of Japan with Siemens in a 50/50 joint venture to form Fujitsu Siemens Computers, absorbing the company and renaming it Fujitsu Technology Solutions in 2009.

Lenovo, meanwhile, which used to be known as Legend until 2003, acquired IBM's Personal Computer Division in 2005, a deal that laid the foundations for the company's global expansion in PCs. Lenovo followed that deal up with a PC joint venture with NEC in 2011, taking over the whole lot earlier this year.

Also in 2011, Lenovo acquired Germany's Medion, and scooped up IBM's System x low-end server business in 2014.