Lenovo Group is in talks to buy the PC business of Fujitsu, with a final deal set to be closed this month, sources reported.
About 2,000 Fujitsu employees are said to be moving to the Chinese company once an agreement has been inked, Reuters reported, citing information from the Nikkei.
The deal will make Fujitsu the second Japanese PC assembler after NEC Corp. to tap Lenovo's help amid a struggling PC market. In 2011, Lenovo and NEC inked a joint venture to improve both side's PC business.
"Fujitsu may transfer its design, development and manufacturing operations to a joint venture led by Lenovo or Lenovo may opt to buy a majority stake in the Japanese company's PC unit," Reuters said, citing the Nikkei.
Earlier, Fujitsu had considered Toshiba in a possible merger that could potentially spun-off Sony's Vaio.
Meanwhile, the Nikkei said that a PC tie-up with the Japanese company could be inserted into the Lenovo-NEC JV, allowing the Chinese maker to have 40 percent of Japan's PC market.
Fujitsu's shares jumped 7.2 percent while Lenovo's were up 1.2 percent on Thursday's opening, following the reports.
The worldwide PC market has been struggling for some time now, due in part to the sales cannibalization by smartphones and tablets.
According to IDC, global PC shipments dipped 4.5 percent in 2016, beating the forecast of -7.4 percent.
"The PC market continues to struggle as we wait for replacements to accelerate, along with some return of spending from phones, tablets, and other IT," said IDC's Loren Loverde.
"Our long-term outlook remains cautions. However, the strong results in the U.S. offer a glimpse of what the market could look like with pockets of growth and a stronger overall environment. It's not dramatic growth, but it could push the market into positive territory slightly ahead of our forecast for 2018," Loverde added.