Analysts hint at Lenovo buying Lexmark

Lexmark is a potential takeover target as sales soar in China

Printer sales in China are growing so strongly that local firms may attempt to buy control of a major foreign printer maker to ensure a stake in the domestic market and a slice of international sales.

Sales of laser printers in China are expanding particularly fast, driven by business users, according to recent data from Lyra Research. 

"Strong printer growth is expected to continue throughout the forecast period [to 2010], particularly in the laser printer market, as China's business users prefer laser output to inkjet for their mainstream business printing," said Lyra Research analysts Larry Jamieson and Ji Rong.

Total laser revenue, including hardware, cartridges and media, is expected to surpass $5bn by 2010.

Analysts suggest that a Chinese firm might attempt buy a foreign printer manufacturer to jump-start local printer manufacturing.

US printer maker Lexmark is the most commonly named target for such an acquisition attempt. 

Giant Chinese PC vendor Lenovo is seen as the most likely buyer, perhaps as leader of a consortium, and almost certainly with government support. 

"Lenovo wants to have an internationally competitive printer business within two to five years. We believe the company is very serious," said the Lyra analysts.

"We checked with Hong Liu, assistant vice president and general manager of Lenovo's peripheral business department, who confirmed this to us."