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China's home appliance giant Haier plans to buy the PC business of Founder Technology Group, a senior Haier manager said Wednesday.

 

According to market rumors, Haier will spend an estimated 400 million yuan (US$50 million) to purchase a 10-percent share in Founder Technology, the second biggest computer manufacturer in China, to become its biggest stakeholder.

 

But Founder Technology denied it will sell its PC business.

 

"I cannot disclose further information about the deal because it is too sensitive", Shanghai Securities News quoted a senior manager as saying.

 

An internal statement circulated in Haier said the PC business is now an integral part of its global branding strategy and will grow rapidly because of its huge customer base and strong brand image.

 

Analysts say the deal --if it goes through-- will cause an upheaval in the domestic PC market.

 

Lenovo is the biggest computer manufacturer with a 32 percent market share, followed by Founder with 12.3 percent.

 

Zhou Qiang, a China Merchants Securities analyst, said Founder may sell its relatively unprofitable PC business if it can get a satisfactory price.

 

The Haier Information Company -- a computer subsidiary of the group -- was set up this September with registered assets of US$20 million. A further US$20 million were recently injected into the company.

 

(Xinhua News Agency December 22, 2006)