Lenovo has agreed to buy Medion, a German computer vendor, in an attempt to strengthen its position in the European market.

The deal, which values Medion at €629.4m ($906m), is the Chinese company’s largest acquisition since its takeover of IBM’s PC unit in 2005, and gives it an established brand and a distribution network in Europe. Although Lenovo has outgrown all other leading PC companies in the past two years, the company has been over-reliant on China, its home market, and its strength in the commercial PC market.

Lenovo is the world’s fourth-largest PC vendor by shipments behind Hewlett-Packard, Dell and Acer. The company’s global market share increased to 10 per cent in the first quarter from 8.4 per cent a year ago, according to IDC, the research firm.