Chinese manufacturer Lenovo, the world's third biggest maker of personal computers, is in talks to buy Dutch firm Packard Bell as it looks to strengthen its market position in Europe.
Lenovo established itself as a global player when it bought IBM's PC arm in 2005, but is currently only ranked sixth in Europe.
If successful, the deal would allow Lenovo to quickly capture market share in a region where it is barely profitable, analysts say.
But it would also expose the firm to an intense battle for consumers between the likes of Dell, Hewlett Packard and Acer.
Packard Bell is valued at about $800m and was sold by Japanese firm NEC to IT entrepreneur John Hui last year.
Lenovo, one of a handful of Chinese companies trying to forge a global brand by investing abroad, commands 8.3% of the global market, ahead of Acer's 7.2% but just slightly more than half of second-placed Dell's 16.1%.
