Chinese PC maker¹ Lenovo has agreed to buy German electronics retailer² Medion in a bid to boost its market share in Europe.

中国PC生产商联想同意收购德国电子经销商麦迪龙以扩大其欧洲市场份额。

Lenovo will pay $331m (£203m) for a 37% stake in the company.

Lenovo, the world's fourth-largest computer maker said it plans to acquire as much as an 80% stake in the company.

It also said it hoped that the deal would help it double its share of Germany's PC market to 14%.

Medion specialises in sales of low-cost computers and electronic devices.

The announcement pushed Medion shares up by 17% in Frankfurt, but Lenovo's shares fell by more than 3%.

The deal comes just four months after Lenovo signed a deal with Japanese firm NEC to establish a joint³ venture in Japan.

It is Lenovo's biggest acquisition（获得物） since it purchased IBM's PC business six years ago.

Better spread

Analysts⁴ said the company's business spread was one of the key reasons for the acquisition.

"The situation with Lenovo is that currently almost 50% of its business comes out of China," said Andrew Milroy of Frost & Sullivan.

"The majority of that is also from enterprise customers," he added.

Mr Milroy said that if the company is to take on its rivals and become a dominant⁵（支配的） global player, its focus has to change.

"They need to establish themselves in the developed markets if they have to take on the likes of Dell and Hewlett Packard," he said.

"Its rivals have a much bigger and better consumer base," Mr Milroy added.

Expansion vs consolidation⁶

The PC market has seen tremendous growth in the past few years, but a squeeze on profit margins⁷ and rising prices of raw materials has seen many manufacturers forge alliances and acquire companies in a bid to keep operating margins healthy.

However, analysts said that while Lenovo has been consolidating⁸ its business for a while, it has to start looking at expanding its portfolio⁹（公文包，文件夹） .

"Lenovo has to start looking at producing the tablet and the next generation devices fast," Mr Milroy said.

He warned that if the company delayed getting into the segment, it may find itself lagging behind rivals.

"No matter what people say, tablets are a serous threat to the traditional PC market," he said.