Taipei (dpa) - Taiwan's computer giant Acer Inc, the world's fourth-largest computer supplier, ANNOUNCED Monday that it has entered into a 710 million US dollar agreement to acquire Gateway Inc, the third-largest PC company in the US and a leading retail PC provider.

"The combination will create a multi-branded PC-company with over 15 billion US dollars in revenues and shipments in excess of 20 million PC units per year," Acer said in a statement.

Under the agreement, Acer will commence a cash tender offer to buy all the outstanding shares of Gateway for 1.90 US dollars per share, which represents total equity value consideration of about 710 million US dollars.

The acquisition has been approved by the boards of directors of both Gateway and Acer and is subject to standard closing conditions, including approval under Hart Scott Rodino, Exon Florio and similar laws outside the US, the statement said.

The acquisition is expected to close by December 2007.

Acer said the takeover will consolidate their position as the third-largest PC company in the world after HP and Dell.

"This strategic transaction is an important milestone in Acer's history,"Acer Chairman Wang Wang Jeng-tang said in the statement.

"The acquisition of Gateway and its strong brand immediately completes Acer's global footprint, by strengthening our US presence. This will be an excellent addition to Acer's already strong positions in Europe and Asia. Upon ACQUIRING Gateway, we will further solidify our position as No 3 PC VENDOR globally," he said.

Asia's main overseas market is Europe, but in recent years Acer has been trying to expand its presence in the US, its second-largest market.

Acer's Italian president Gianfranco Lanci said that Acer's and Gateway's geographical presences and product positioning are highly complementary.

"We believe that our combined scale will lead to significant efficiencies. Gateway has built one of the industry's most powerful and unique brands and with this acquisition, we will have the opportunity to implement an effective multi-brand strategy and cover all the major market segments,"he said in the statement.

Established in 1976, Acer employs 5,300 people supporting dealers and distributors in more than 100 countries. Revenues in 2006 reached 11.32 billion US dollars.

Acer is the world's fourth-largest PC vendor after HP, Dell and China's Lenovo.

http://www.bangkokpost.com/breaking_news/breakingnews.php?id=121151Great post. I always had a feeling that Gateway was going to be purchased by another computer company. I am a little surprised that it was Acer who did it though.Exactly, I really don't follow the corporate books on tech companies and see who has the large cash reserves but an acquisition like this , you'd THINK someone like Nvidia or a HP or those types would have been the buyer..... Just out of curiosity, is E-Machines part of the deal. Gateway owns E-Machines.Yeah, it wasn't too long ago when I needed some info on my emachine t3422 from their tech support page, they now consider the emachine models as all gateway products*


additional info on post*

Gateway also announced Monday that it intends to buy Packard Bell, a Paris-based computer brand owned by Lap Shun John Hui, the former owner of eMachines. Hui also owns 4.9 percent of Gateway. Packard Bell sells computers in Europe.

When Hui acquired Packard Bell last year, he waived certain non-compete arrangements. He gave Gateway the right to buy the new company. Gateway said it exercised that right, called right of first refusal, to buy all of Packard Bell's parent PB Holding Company on Monday.

Hui declined to comment on whether he supports the Acer acquisition. Last August, he had offered to buy Gateway's retail unit for $450 million. Gateway turned him down.
This is an excellent calculated move on Acer's part. I believe the North America distribution factor was more important to them than just gobbling up a computer manufacturer...they would have had to spend alot more dollars to do it themselves...
Along with some of the vendor contracts that were probably involved they will come out smellin like a rose when all is said and done...

On top of that Acer still makes pretty solid computers and components.
If you only knew how many computer parts you buy that are actually manufactured by Acer you'ld be amazed.