Acer to acquire Gateway in $710 million deal
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Taiwanese PC maker Acer Inc. will acquire Gateway Inc. for US$710 million, Acer announced Monday.
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Acer Inc.'s shares fell sharply Tuesday, one day after the Taiwanese computer maker said it would acquire Gateway Inc. for $710 million.
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Gateway has agreed to sell a unit targeting education, medium-size businesses, and government users to MPC for $90 million, the companies said Wednesday.
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Taiwanese PC vendor Acer Inc. has started selling laptop PCs at popular retailer Best Buy Co. Inc., expanding its presence in the U.S. market.
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Acer's acquisition of Gateway will result in a different product mix starting with some new Gateway laptops to be released early next year, an Acer executive says.
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Computer manufacturer sells new line through major retail centers in bid to return to profitability. SAN FRANCISCO  - PC manufacturer Gateway Inc.
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Rudi Schmidleithner, head of Acer's Pan-America Organization, will take charge of Gateway at the end of January.
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Acer's acquisition of Gateway has had a definite impact on its overall market share, its chairman said Friday, and forecasted the manufacturer would be able to ship 25 percent more computers in 2008.
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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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Acer Inc. executed a master stroke in the global war for PC market share withÂ its US$710 million purchase of Gateway Inc., but it may take a while for the market to see the light.
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Yahoo! Inc. (Nasdaq:YHOO) and Acer Inc., the world's number-four branded personal computer (PC) vendor, today announced a multi-year strategic partnership to distribute a co-branded toolbar and start page and to set Yahoo! as the default search engine on all Acer PCs sold globally.
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Gateway Inc. (GTW.N), the computer maker that recently shuttered its chain of 188 stores, will begin selling its desktops at CompUSA Inc.'s outlets later this week, the two companies said on Monday.
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Acer agrees to take over US PC-maker Gateway creating the world's third largest producer of computers.
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(InfoWorld) - Gateway has rejected an offer to sell its retail arm to the California man who founded the company's eMachines line. Lap Shun "John" Hui surprised Gateway's board in August when heÂ offered to buy their retail operationsÂ for a reported $450 million. Gateway issued a statement Friday saying it had decided that the offer was not in the best interest of its shareholders. In 2004, Gateway paid Hui $234 million to acquire his company eMachines, a line of entry-level PCs. Hui used the money to start an office supplies company, and still owns about 5 percent of Gateway's stock. Hui's offer would have stripped Gateway of its agreements with third-party resellers like Best Buy Co., Circuit City Stores, and Wal-Mart Stores. The company sells the rest of its computers through direct sales channels on the telephone and Internet, and through its professional business channel. Gateway, of Irvine, California, is the third-largest PC vendor in the U.S. but has posted financial losses for several quarters. Still, analysts said that breaking the company up would not have made it more competitive.
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Taiwan&#39;s Acer Inc will buy  Gateway Inc for $710 million to double its U.S. presence and  unseat China&#39;s Lenovo as the world&#39;s No. 3 PC maker, while  dealing a blow to its efforts to grow in Europe.
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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.
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(InfoWorld) - Retail consumers in the U.S. could begin to see great deals on computer purchases as PC vendors get more competitive in the wake ofÂ Acer's announcement on Monday that it plans to buy Gateway. Acer will probably try to reinvigorate the Gateway brand, using spiffier designs and faster processors in an effort to add cachet to Gateway and eMachines labels which are often seen as "bottom dwellers" selling low-cost PCs, said J.P. Gownder, a principal analyst with Forrester Research. In announcing the deal, Acer President Gianfranco Lanci said he planned to preserve Gateway's "powerful and unique brand" in order to cover a variety of consumer market segments, differentiating the two brands over time in an effort to reach a broader variety of consumers. By announcing its plan to concentrate on the U.S. retail market, Acer is signaling that it will not challenge far larger vendors like Hewlett-Packard and Dell for corporate enterprise deals. Acer also said on Monday that it planned to divest Gateway's professional business division, and was already in talks with a potential buyer. That strategy will probably have a far greater impact on Acer's long-time rival Lenovo than on larger vendors, Gownder said. "For HP and Dell, it's going to be two years before this makes an impact on their business," Gownder said. "Lenovo is the company that really loses here, especially if Acer is able to pick up Packard Bell and get a foothold in Europe, as well." On Aug. 7, Lenovo Group announced it had agreed to buy Packard Bell, but that deal appears to be scuttled: part of Monday's news was thatÂ Gateway will exercise its right of first refusal to acquire shares in Packard Bell's parent company. In addition to tripping up its rival Lenovo, Acer will gain valuable retail leverage in the U.S., including Gateway's online retail site and its shelf space in major retailers like Best Buy Co. Inc., Gownder said. Still, Acer faces a large workload in creating a successful merger with Gateway before it begins to reap profits from the move. "Acer has made a smart, imperfect decision. But from what's available to them, it was the best move on the chessboard," Gownder said. Acer now faces pressure to duplicate its success among small business customers and Asian markets in the competitive U.S. retail market, other analysts said. Acquiring Gateway could give it the leverage to succeed, but only if Acer completes a difficult merger, said Charles Smulders, an analyst and managing vice president at Gartner Inc. First, Acer must make sure it retains Gateway's staff in the U.S. channel and retail sectors, while divesting the money-losing professional business, he said. That move would have little effect on Gateway's small stake of the corporate enterprise market, but a larger impact among its government and academic customers. Then, Acer could dedicate its engineers to improving Gateway's image as an economy brand. "The Gateway brand is very well known, but people are unclear what it stands for. So that is one challenge Acer will face," Smulders said. The company will probably try to establish a reputation for using the latest technology, as opposed to marketing Gateway as the brand with the best technical support or the lowest prices, he said. To Acer's advantage, Gateway has been cutting costs for five years already, so that will be a much easier task than HP faced when it bought Compaq, Smulders said. "I certainly think HP will be taking notes, simply because Acer has been gaining ground so fast, particularly outside the U.S. If Acer can pull this off, it would be a serious challenge to HP." HP declined to comment on the possible implications of the deal. "HP does not comment on the business strategies of its competitors," said corporate spokeswoman Emma McCulloch. Â