Acer To Buy Gateway For US$710 Million

[+Warwagon MVC]

TAIPEI -(Dow Jones)- Taiwan's Acer Inc. (2353.TW), the world's fourth-largest computer maker by shipments said Monday it agreed to buy Irvine, Calif.-based computer maker Gateway Inc. (GTW) for US$710 million in a deal that is expected to shore up the Taiwanese company's weak presence in the U.S. market.

Acer is offering to buy Gateway shares for US$1.90 each, a premium of 57% to Gateway's Friday closing price of US$1.21 each.

The companies said in a joint statement Monday they expect the acquisition to close by December pending regulatory approval in Taiwan and the U.S.

The two companies will have combined revenue of more than US$15 billion and PC shipments of over 20 million units a year, they said.

"Both Acer's and Gateway's geographical presences and product positioning are highly complementary," said Acer President Gianfranco Lanci in the statement. " We believe that our combined scale will lead to significant efficiencies."

The two companies said they expect "significant" revenue and cost savings after the merger because it will result in a reduction in component costs for both companies.

The potential cost savings will be more than US$150 million, Acer and Gateway said in their statement.

Bryan Ma, an analyst at U.S. market research firm IDC said, Acer's acquisition of Gateway is expected help the Taiwan company's relatively weak presence in the U.S. market.

"Acer ranked sixth in the U.S. market, while Gateway ranked third as of the second quarter. Combined, they are expected to double their shipments," he said.

Citigroup Inc. is the financial advisor for Acer, while Goldman Sachs Group Inc. is acting as the financial advisor for Gateway.

-By Wei Yi Lim and Joy C. Shaw, Dow Jones Newswires; (8862) 2502-2557; [email protected]

http://money.cnn.com/news/newsfeeds/articl...NLINE000092.htm

[Minifig]

This could be good news, or it could be very, very bad news.

[Bazenga]

Very nice, I love Acer. In fact, I'm going to buy an Acer notebook tomorrow :>

[goji]

eMachines was bought by Gateway not to long ago, and now Gateway by Acer? Could this mean better laptops?

[L3thal Veteran]

Not a bad merger. I know I wouldn't buy neither of their laptops even if they were on sale but Gateway desktops are very decently priced for what they offer but again, I stay away from both brands due to personal experience.

HP ftw ;)

[TruckWEB]

Last year at the job they ordered a batch of Acer laptop with docking (lowest bidder).... The thing was so hot and the docking plastic to thin, the thing melted....

It happened more than once, before the laptop where given to the users. Well, they where all replaced and got DELL laptop instead.

No Acer for me!

[Tech Star]

Whats going to happen? There is going to be on brand "Acer" or two "Acer" and "Gateway?"

[PNWDweller]

Whats going to happen? There is going to be on brand "Acer" or two "Acer" and "Gateway?"

Probably the same as HP and Compaq. Individual names, but Gateway will be on there as "a division of Acer"

[+Warwagon MVC]

Probably the same as HP and Compaq. Individual names, but Gateway will be on there as "a division of Acer"

that would be a murger, this is a buy out.

[Bawx]

I thought Acer was small, I'd expect Gateway to buy Acer, not the other way around.

[SnowRanger13]

I thought Acer was small, I'd expect Gateway to buy Acer, not the other way around.

I've seen 10x more Acers in my life then Gateways. The third computer that I ever had in my house was a Acer. Of course now I'm on my like 8th Computer.

[Dane2003]

In my opinion, this is such an unfortunate sale. I will no longer purchase Gateways once this merger has taken over. Acer's by far have the worst rate of being returned than any other computer I sell. I work in retail and i've seen so many more Acer's return than any other computer we sell. They dont make quality products. Common complaints have been key's falling off, defective batteries not working, and screen lamps burning out.

[Cormier6083]

I hope Gateway stays Gateway. I can still remeber my first Gateway. A S 500 tower with a 2.4 GHz Pentium 4 processor and 258 MB of RAM. It had a super small 15" LCD. Lollz.

[.KICK]

Acer rocks, I wonder what this will bring though. $710 million is alot

[Dwight Schrute]

now acer can sell computers at costco too.

[Allan]

The New "AcewayMachine" ...

Edited August 28, 2007 by NeowinSecurity

[Rappy Veteran]

Not a bad buy out...I always fancied one of those Acer Ferrari laptops :D

[+Warwagon MVC]

Acer rocks, I wonder what this will bring though. $710 million is alot

not really if you think youtube got purchased for 1.5 billion

[SacrificialSoldier]

Could be good I guess. I never liked either :hmmm:

[+Warwagon MVC]

gateway is the poster child for company ****ups

in the early 90's up until about 1999 / 2000 EVERYONE in Iowa had a gateway, hell even the TV show ER had a gateway on the service desk, how a company can screw up so bad, i'll never now, now its all dells

[I am Reid]

Well at least now we can just lump all the crap together in one big group.

[L3thal Veteran]

gateway is the poster child for company ****ups

in the early 90's up until about 1999 / 2000 EVERYONE in Iowa had a gateway, hell even the TV show ER had a gateway on the service desk, how a company can screw up so bad, i'll never now, now its all dells

I still ponder that question as well. How did Gateway go from such a big player in the PC market to the crap it is today? On the other hand, HP was a marginal player in the 90's to a certain extent and now they are the world's leading seller of computers.

[Yuxi]

Well at least now we can just lump all the crap together in one big group.

:yes:

I usually avoid both Acer and Gateway from past experiences, although Dell is taking over and I'm not fond of the quality of their desktops.