Fujitsu in talks to offload PC business to Lenovo

Lenovo to take controlling stake in joint PC venture with Fujitsu

Fujitsu has confirmed that it is in talks with Lenovo over a joint venture in which the Beijing-based company take control of Fujitsu's ailing PC operations.

If it goes through, the deal will represent just the latest in a series of acquisitions by Lenovo, that has helped the company to global market leadership in the declining PC sector.

In the past 12 years, Lenovo has absorbed the PC businesses of IBM, NEC and Germany's Medion, as well as IBM's x86-based server business.

For Fujitsu, the deal follows the collapse of talks with Sony and Toshiba to pool their respective PC businesses in a three-way merger after the companies were unable to agree a price.

While Fujitsu is keen to discard a struggling business, Lenovo will enjoy even greater economies of scale in a sector in which it enjoyed 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.