Lenovo-Packard Bell Merger Hit by Acer-Gateway Deal
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Acer's deal to acquire Gateway for $710 million has derailed Lenovo's plans to acquire Packard Bell.
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Irvine, California - Gateway reported a narrowed net loss in the first quarter on continued restructuring of its operations and the integration of newly acquired firm eMachines.
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(InfoWorld) - Lenovo Group reclaimed the number three spot among PC vendors during the second quarter, pushing rival Acer back into fourth place. But Acer's exceptionally fast growth means the company isÂ likely to overtake LenovoÂ as number three for the entire year, if current trends continue. Acer has been on a roll in recent quarters, grabbing market share and putting pressure on Lenovo. During the first quarter of 2007, Acer tied Lenovo for third place, with both companies reporting shipments of nearly 4 million PCs, giving each company 6.7 percent of the market, according to IDC. Acer, which has made taking the number three spot from Lenovo aÂ principal goal for the year, was able to match Lenovo during the first quarter because of seasonal buying trends in China. Lenovo depends heavily on China, where it has long dominated PC sales. The company's first-quarter sales were slowed by the Chinese New Year holiday, a time when PC sales dive in China. Lenovo saw its first-quarter shipments increase 17.4 percent over the previous year, while Acer's shipments rose 41.4 percent, IDC said. Acer's first quarter sales weren't hit during by Chinese New Year because the company remains a relatively minor player in China, despite having roots in Taiwan, which shares a common language and culture. Acer's presence is much stronger in Taiwan, which also celebrates Chinese New Year. But Taiwan's relatively small population means the holiday had a minor impact on Acer's overall sales during that period. During the second quarter, Lenovo was able to reclaim the number three spot, with a 22.3 percent increase in unit shipments, to almost 4.9 million units, IDC said.Â Acer fell to the number four spot, but showed strong growth during the period. The company's shipments rose 55.4 percent over the same period last year, to almost 4.3 million units -- just 600,000 units fewer than Lenovo. That relatively narrow gap puts Acer within striking distance of Lenovo, assuming current growth trends continue through the rest of the year. Acer did well around the world during the second quarter, with the company posting unit shipment growth of 30 percent or more in every region. The company did particularly well in the Americas, IDC said. "New retail and dealer partner agreements are quickly expanding the company's access to the market, contributing to volume gains," it said. Â
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Hewlett-Packard Co. (HP) has abandoned plans to integrate a number of advanced technologies it acquired in its 2002 purchase of Compaq Computer Corp.
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(InfoWorld) - The chairman and CEO of Acer Inc. has vowed to step down if the company's bid to join with Gateway Inc. does not succeed. "The merger will definitely succeed. If it doesn't ... I will resign," the Chinese-language newspaper, Economic Daily News, quoted Acer Chairman and CEO J.T. Wang as saying in an interview published Wednesday. Acer spokesman Henry Wang confirmed the statement. The statement came amidÂ growing criticism of the acquisition, which the companies' boards have approved. Industry watchers and stock market analysts have called the US$710 million purchase too expensive, saying Acer should have foregone the deal and continued to grow its U.S. business from the ground up. The company's U.S. sales have grown at over 100 percent for the past few years, according to Acer. Other analysts fear Acer may have trouble bringing Gateway into its fold because it may ultimately become a three-in-one deal, including Gateway subsidiary eMachines and Europe's Packard Bell BV. That may be too many companies to absorb in one go, analysts say. "The premium paid to Gateway may be too high, and the execution risk of multiple-brand strategy is clearly the key here," said Vincent Chen, PC industry analyst at CLSA Asia-Pacific Markets in Taipei. Taiwanese investors don't like the deal, either.. Acer's shares have fallen by their daily market limit, 6.9 percent, for each of the past two days to close at NT$55.1 (US$1.67) Wednesday on the Taiwan Stock Exchange. Acer agreed on Monday to buy Gateway in an all-cash deal for US$1.90 per share, a 57 percent premium on its closing share price of US$1.21 on the New York Stock Exchange on Friday. Acer said the deal will transform it into a much larger company with US$15 billion per year in revenue and shipments of nearly 20 million PCs, giving it a solid base in the important U.S. market. The companyÂ plans to market multiple PC brands worldwideÂ after the transaction, thereby increasing sales. The deal will also help it cut costs. Size is vital to gaining volume discounts from parts suppliers, Acer said. The purchase still faces regulatory and shareholder approval. Â
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The joint venture ends shortly after a rival buys the PC maker's LCD unit.
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When Hewlett-Packard Co. HPQ.N  warned of a profit shortfall last week, it blamed problems it  had combining two SAP systems, something that the computer  maker believed would be relatively simple when they were  putting together a deal to buy Compaq two years ago.
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Gateway CEO Ed Coleman will resign from his position at the end of January, clearing the way for Acer&#39;s top executive in the Americas to take the helm, the Taiwanese company said Friday.Acer completed its US$170 million acquisition of Gateway in October. Coleman, who served as CEO of Gateway since 2006, oversaw the start of efforts to integrate the U.S. company with its new owner. However, the completion of those efforts will be the responsibility of Rudi Schmidleithner, head of Acer&#39;s Pan-America Organization, who will take charge of Gateway at the end of January.Acer announced Coleman&#39;s departure in a brief statement that thanked him for his contributions during the transition period that followed the acquisition announcement in August. The statement said Coleman made the decision to leave the company, but did not offer a specific reason.Gateway now&#160;operates as a subsidiary of Acer and maintains its own PC brand, which is well known in the U.S.
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(InfoWorld) - Acer Inc.'s agreement to acquire Gateway Inc. has foiled Lenovo Group Ltd.'s plans to buy PC vendor Packard Bell BV, and could leave Acer owning both Gateway and Packard Bell. On August 7, Lenovo revealed it was in discussions with Packard Bell over a possible acquisition. At the time,Â it looked like Lenovo had beaten Acer, which was also interested in acquiring the company. However,Â Acer's plan to buy Gateway for $710 million, announced Monday, trumps anything Lenovo brings to the table in its negotiations with Packard Bell. In 2006, Gateway signed an agreement with John Hui, Packard Bell's largest shareholder, that gives Gateway the right of first refusal if he decides to sells PB Holding Co. SARL, the parent company of Packard Bell. What that means is that if Packard Bell wants to enter into a final agreement to be purchased, the company has to ask Gateway first, said Y.T. Du, of Citigroup Global Markets Inc., which represented Acer in the negotiations. Gateway can refuse the deal if it wants and enter into purchase talks with Packard Bell, he said. That is exactly what Gateway has done, announcing plans to exercise its right of first refusal at the same time the Acer deal was unveiled. The agreement between Hui and Gateway is rooted inÂ Gateway's 2004 acquisition of eMachines, a PC vendor that Hui founded. When Hui acquired his stake in PB Holding Co., he granted the right of first refusal to Gateway in exchange for the company waving parts of the noncompete agreement that Hui signed when eMachines was sold. Now that Gateway has entered into talks to acquire PB Holding from Hui, Acer could end up owning both Gateway and Packard Bell. While a Packard Bell acquisition would increase Acer's market share in Europe, a deal also means Acer will face having to integrate two companies with its existing operations instead of only one. "Acer is still really strong in Europe," said Bryan Ma, director of personal systems research at IDC Asia-Pacific. Ma worried that Acer's desire to acquire Packard Bell is driven more by a desire to slow Lenovo's growth in Europe, rather than a pressing need to strengthen its own position there. A Lenovo spokeswoman was not immediately available to comment. Â  With additional reporting by Dan Nystedt in Taipei. Â
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By The Associated Press  IRVINE, Calif. - Gateway Inc., the third-largest personal- computer company in the United States, said Friday it rejected an unsolicited $450 million bid for its retail business from eMachines Inc. founder Lap Shun Hui.  Gateway said the Aug.
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(InfoWorld) - Acer Inc. plans to acquire Gateway Inc. in a deal worth $710 million that Acer says will make it the world's third-largest PC vendor. Under terms of the agreement announced Monday, Acer will purchase all of Gateway's outstanding shares for $1.90 per share. The deal has already been approved by the boards of directors at both companies and should be completed by the end of this year, subject to government approval, Acer said in a statement. Gateway's shares ended at $1.21 Friday on the New York Stock Exchange. "This is the biggest acquisition in Acer's 30 year history," said J.T. Wang, Acer's chairman, speaking at a news conference in Taipei. "After this acquisition, we are solidly number three in the global PC market," Wang said. Acer's acquisition deal with Gateway also derails rivalÂ Lenovo Group's plans to acquire Packard Bell. Alongside the acquisition deal with Acer, Gateway unveiled plans to exercise its right of first refusal to acquire shares in Packard Bell's parent company, PB Holding Co. SARL, from John Hui. Hui is the founder ofÂ eMachines, which Gateway acquired in 2004, and the largest shareholder in Packard Bell. Gateway did not disclose how much it has offered for Hui's stake in PB Holding. Acer's efforts to overtake Lenovo will get a big boost from Gateway, which was the world's eighth largest PC vendor during 2006. Together Acer and Gateway shipped 18.6 million PCs during 2006, compared to 16.6 million PCs shipped by Lenovo. The Gateway acquisition will have the greatest impact in the U.S., where Acer has been growing fast but remains in sixth place among PC vendors. "This is definitely a good play for them from the U.S. consumer perspective," said Bryan Ma, director of personal systems research at IDC Asia-Pacific. However, the big question is how Acer plans to integrate Gateway with its own operations, and how smoothly the integration process will go, he said. Acer's share of the U.S. PC market grew 164 percent during the second quarter of 2007, compared to the same period last year. Acer shipped 888,000 PCs to U.S. customers, giving the company a 5.2 percent share of the market. By comparison, Gateway was the fourth-largest PC vendor during the second quarter, shipping 965,000 PC and taking 5.6 percent share of the U.S. PC market. The Gateway acquisition vaults Acer into the number three spot in the U.S. PC market, behind only HP and Dell. "Acer is an outstanding strategic partner for Gateway," said Ed Coleman, CEO of Gateway, in a video feed at the Taipei news conference to announce the deal. Gateway reported net income of $1.9 million for the second quarter, compared to a loss of $7.7 million one year earlier. The company said gains in its retail division during the period were offset by declining revenue in its professional and direct divisions. However, talks are currently underway to sell off the professional division to a third party, Gateway said Monday. The company did not offer details of those discussions. Â
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A fast growth rate and recent acquisitions in the U.S. and Europe will extend Acer&#39;s lead over Lenovo Group as the world&#39;s third-largest PC vendor behind Hewlett-Packard&#160;and Dell, according to a study released by Gartner on Wednesday.Acer and Lenovo stood neck-and-neck in global PC shipments with 8.1 percent and 8 percent market shares, respectively, in the third quarter of 2007. Before acquisitions, Acer shipped 5.54 million PC units worldwide, a healthy 58 percent year-over-year increase. The growth rate overshadowed Lenovo, which shipped 5.48 million PCs, a 22.8 percent increase.Gartner&#39;s quarterly figures were compiled before&#160;Acer finished its acquisition of Gateway&#160;on Wednesday for $710 million. Acer also funded Gateway&#39;s proposed acquisition of European PC vendor Packard Bell&#160;for an undisclosed sum. That was&#160;a blow to Lenovo Group, which in early August revealed it was in discussions with Packard Bell over a possible acquisition.Packard Bell is largely a European vendor and has a small market share, similar to eMachines in the U.S before it was acquired by Gateway, said Diana Maranon, managing partner at Averil Capital Markets Groups. Maranon&#39;s company brokered Gateway&#39;s Packard Bell acquisition.An IDC report, also released Wednesday, listed Lenovo as the world&#39;s third-largest PC vendor but indicated&#160;Acer could overtake Lenovo&#160;with its growth rates in the Europe, Middle East, and Africa and Asia-Pacific markets, excluding Japan. Acer&#39;s U.S. PC shipments grew more than 100 percent during the third quarter, though it could face more pressure from competitors as it continues to expand, IDC said.In the U.S., Acer replicated the business strategy that made it highly successful in Europe: de-emphasize retail, sell through indirect channels, and offer low, competitive prices, said Roger Kay, founder and president of Endpoint Technologies Associates. Acer stands at the low end in the U.S. market, and the Gateway acquisition gives it a good position in the middle and high-end markets, Kay said.Gateway&#39;s worldwide shipments increased 8 percent in the third quarter, though U.S. shipments fell 14.4 year over year, Gartner said.Acer&#39;s global growth strategy is paying dividends and could affect Lenovo in the U.S. and Europe, Kay said.The Packard Bell acquisition was a defensive move for Acer to ensure Lenovo doesn&#39;t get a toehold in the European market, Kay said. Acer is already one of the top notebook sellers in Europe.Lenovo showed positive growth in global markets, but Acer&#39;s acquisitions block Lenovo from acquiring some valuable shelf space for product distribution, said Charles Smulders, managing vice president at Gartner, in an e-mail interview.Lenovo could not be reached for comment.Global PC shipments&#160;during the third quarter were 68.4 million, driven by high demand for laptops in the home market, Gartner said. HP was the world&#39;s top PC vendor, with 12.8 million units shipped, a 18.8 percent market share, and 33.1 percent year-over-year volume growth. Dell followed with a 14.4 percent market share, shipping 9.86 million units, a 3.5 percent increase.The survey includes desktop PCs, laptops, and x86 servers.
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Acer plans to buy the U.S. computer maker for $710 million in a deal that will push it past Chinaâs Lenovo Group to become the worldâs third largest PC vendor.
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Acer's planned $710 million acquisitionÂ of U.S. PC vendor GatewayÂ won antitrust approval in the U.S. as the clock struck midnight Monday, Gateway said.
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TAIPEI/SHANGHAI  - Taiwan's Acer  will buy Gateway  for $710 million, creating the world's No. 3 PC maker and doubling its U.S. presence while dealing a blow to arch-foe Lenovo's  efforts to grow in Europe.
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Loan cutbacks put dent in Numonyx Intel and STMicroelectronics NV have been forced to delay the merger of their cash-starved flash memory units because of "significant turmoil" in the financial markets.â¦
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Computer maker Acer of Taiwan announced yesterday that it would acquire Gateway, the third-biggest U.S. personal-computer company, for about $710 million in cash.