Fujitsu in talks to offload PC business to Lenovo

China's Lenovo is in talks to bring Fujitsu's personal computer business under its control, allowing the Japanese company to focus on IT services and other businesses.

The deal, if realised, will make Fujitsu the second Japanese PC assembler after NEC to seek the help of the world's largest PC maker to stay competitive in the thin margin market. Lenovo and NEC set up a PC joint venture in 2011.

Fujitsu's shares gained 7 percent in early trade to hit their highest level since January yesterday, compared with a 0.6 percent gain for the broader market. Lenovo shares were up 2 percent.

Fujitsu said in a statement it was considering various options for the PC unit but had not yet made a decision on its future. Lenovo declined to comment.

The company had initially negotiated with Toshiba and unlisted Vaio, which was spun off from Sony, for a three-way merger of their PC businesses. But the talks fell through earlier this year as the companies were unable to agree on the details.

Global demand for PCs has been squeezed by sales of smartphones and tablet computers. Smaller makers less able to benefit from large scale production face an uncertain future.

In the second quarter of this year, worldwide shipments of PCs were stronger than expected, but nonetheless shrank 4.5 percent from a year earlier to 62.4 million units, according to technology research company IDC.

Lenovo accounted for 21.2 percent of those shipments, followed by HP with 20.8 percent, and Dell with 16 percent. Asus had a 7.2 percent share while Apple held 7.1 percent.

Fujitsu shipped 4 million units in the year ended in March, mostly for the Japanese market, the company said. It did not appear in IDC's top five rankings.