China's technology giant Lenovo Group Ltd is set to acquire Fujitsu Ltd's personal computer business, a Japanese business daily reported on Thursday. The sale is expected to allow the Japanese electronics company to focus on its IT services and other businesses as the PC market continues to shrink.

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Fujitsu may transfer its manufacturing operation along with its design arm to a joint venture led by Lenovo, or allow Lenovo to buy a majority stake in its PC business, the daily publication said. The financial terms of the potential contract remain unknown.

Fujitsu would move 2,000 workers to Lenovo, according to the newspaper.  Both companies are expected to seal the deal by the end of this month.

 Lenovo and Fujitsu have declined to comment on the report.   

Lenovo, which is the largest PC maker in the world, is expected to further profit from its acquisition of Fujitsu's computer business. However, experts say that rise in sales of smartphones and tablets have squeezed the global demand for computers.   

Lenovo already sells PCs in the Japanese market through a joint venture with NEC Corporation. The joint venture has a dominant 30 percent market share in the Japan's PC market. Fujitsu is the second biggest company in the market with a 15 percent share.

Before starting its negotiations with Lenovo, Fujitsu was in talks for a trilateral merger with Toshiba Corp.'s computer business and Vaio Corp. However, the negotiations broke down.

TagsLenovo, Fujitsu, china, Lenovo PC, Lenovo and Fujitsu Computer Business