NEC in talks to sell Packard Bell

NEC Corp. executives are negotiating the sale of the company’s Packard Bell division, reportedly to eMachines founder Lap Shun “John” Hui. The move would leave NEC without a consumer PC brand, while it continues to supply the European professional market with NEC-branded computers.

“NEC is considering an offer, and the process of the sale is underway, but no deal has been completed,” NEC spokeswoman Kazuko Andersen said on Friday.

However she refused to confirm a story in the International Herald Tribune which identified Hui as the potential buyer.

Hui has been publicly shopping for a PC company in recent weeks. In August, he made an offer to buy the retail arm of Gateway Inc., but the company’s board rejected the deal. Hui made his initial fortune when he founded the entry-level PC vendor eMachines Inc., and sold it to Gateway in 2004 for US$234 million.

Hui owns a reported five percent holding of Gateway stock, as well as Joui International, an office supply company. He has made no public statement about the NEC offer, but has posted media reports about it on his Web site. Calls to the investment banking firm that represents him, Averil Capital Markets Group Inc., were not returned.

Whoever the buyer is, this sale will continue NEC’s shift from the consumer sector toward enterprise communications. NEC has made several moves in recent months to build its position in telecommunications markets, including a deal in July with Matsushita Electric Industrial Co. Ltd. (Panasonic) to develop mobile phone handsets, and with Texas Instruments Inc. to build a hardware platform for future phones.

The company also agreed in April to buy 60 percent of the Internet Protocol (IP)-based communications division of Koninklijke Philips Electronics NV. NEC described that deal as a step in its plan to achieve a 10 percent share of the global communications market.

Packard Bell is the third-largest vendor of consumer PCs in Europe, where its biggest markets are the U.K., France, Spain, Italy, the Netherlands and Belgium, the company said. In recent years, Packard Bell has begun to sell MP3 players and DVD players as well as basic PCs, and is now expanding geographically into developing markets in eastern Europe, the Middle East, Africa and Latin America.

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