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Acer slogs through the red tape to get Packard Bell

In late August, Acer announced that it would acquire U.S.-based Gateway, Inc. for $710 million USD. The move came as a shock to many who weren’t expecting such a move from the Taiwanese computer giant.

At the time, Acer said that it acquired Gateway to expand its presence in the U.S. and strengthen its position in the worldwide marketplace. The acquisition of Gateway also meant that Acer gained access to low-cost PC maker eMachines which Gateway purchased in 2004 for $262 million USD.

"The acquisition of Gateway and its strong brand immediately completes Acer's global footprint, by strengthening our US presence," said Acer chairman J.T. Wang in August. "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 number three PC vendor globally."

Soon after the announcement was made, however, it became clear that Acer really wanted to go after Packard Bell. Gateway was given the right of first refusal (ROFR) for control of PB Holding Company S.à.r.l., the parent company for Packard Bell, by John Hui in June 2006. 

Acer today announced its intention to acquire all shares of PB Holding Company S.à.r.l., thus giving it complete control of Packard Bell. The acquisition is expected to be completed between the fourth quarter of 2007 and the first quarter of 2008.

Acer's latest acquisition means that it will have now have prime positioning to gain market share in Asia Acer), the U.S. (Gateway and eMachines) and Europe (Packard Bell).

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Packard Bell still exists?
By wolrah on 10/9/2007 8:45:10 AM , Rating: 2
The last time I saw a Packard Bell computer was around 1998, I had no idea they were still around.

By Master Kenobi on 10/9/2007 8:53:49 AM , Rating: 3
Not here in the states, but they are common in Europe. I think buying Gateway gives them a nice U.S. footprint, and now Packard Bell will give them a nice European footprint, expanding into both markets immediately.

RE: Packard Bell still exists?
By Misty Dingos on 10/9/2007 8:57:06 AM , Rating: 2
I think that someone is sweeping up the dead wood. It will make a pretty bonfire but will they be able to make enough smoke to move up to a front running company? Are they going to be able to compete with Dell or HP at the end of the day?

RE: Packard Bell still exists?
By Mitch101 on 10/9/2007 9:04:10 AM , Rating: 5
I thinks its all demographic buys. Each one brings a storefront or geographical location to the mix. Combine them all and you wind up with some real coverage. Then eliminate the duplicate areas like research and development and you wind up with a lean company that can take on Dell or HP.

RE: Packard Bell still exists?
By BillyBatson on 10/9/2007 10:01:26 AM , Rating: 2
That is a good point I can see this happening where all the overlapping portions of the 3 companies are eliminated keeping just one of the two or perhaps even three entities present making it a more lean company as you said. In this end will this produce a company able to take on HP and Dell? We won't know for a while but at the least some more serious competition might bring down overall prices

RE: Packard Bell still exists?
By jak3676 on 10/10/2007 2:22:13 PM , Rating: 2
I've seen some analysis that this was as much a defensive move for Acer as it was an attempt to expand into Europe. Lenovo had publicly stated that they were interested in Packard Bell - and it didn't look like Gateway was in any position to challenge that. In the end Acer not only boosts their position, but they take it away from Lenovo.

RE: Packard Bell still exists?
By spluurfg on 10/9/2007 11:22:57 AM , Rating: 2
This isn't just about research and development -- in a sense, Acer will be even more vertically integrated than Dell, in that it is one of the major OEM manufacturers in Asia. Buying Gateway and Packard Bell will allow them to become their suppliers, benefiting their existing businesses and (hopefully) cutting costs the two pc manufacturers. Acer was actually the progenitor of Benq and AU Optronics (the A is for Acer), one of three dominant LCD panel makers in the world (along with LG Phillips and Samsung TN).

RE: Packard Bell still exists?
By Cogman on 10/9/2007 9:39:31 AM , Rating: 2
I don't think this will be the move that will put acer in front of a front runner company. But I do think this will ultimately improve their business and generate a higher revenue for them. Acquisitions don't always have to be about taking away the first place spot, in this case I think they are just planning on improving overall sales and profit.

RE: Packard Bell still exists?
By helios220 on 10/9/2007 9:46:09 AM , Rating: 2
My first Pentium computer was a Packard Bell, I had a sweet Pentium I 133MHz PC back in the day for rocking some Duke Nukem 3D and the likes.

Aside from that, I can't remember seeing one in quite some time although I am aware they have presence in other markets.

Keep the Acer name?
By MADAOO7 on 10/9/2007 12:53:27 PM , Rating: 2
I've always bought Acer products. I remember my first 4x CD-RW was an Acer. I think they have a great reputation, great quality products and I think having a more recognizable name will only help them. Unfortunately, I don't know how strong the Gateway name is anymore. They really have fell quite a bit from their heyday. Do you think they'll keep the Gateway name and use only Acer? I guess that would defeat the point of buying Gateway though. Or do you think they will get rid of Acer brand goods and call them all Gateway now? Either way, I think it's a win win for Acer. Competition is always good in technology. I mean look at Vizio, make a average performance LCD at a low price and bam....your the market leader. Still blows my mind.

With that said, does anyone know where Vizio came from? Like they came out of friggin no where.....

RE: Keep the Acer name?
By Oregonian2 on 10/9/2007 2:17:49 PM , Rating: 2
Exactly where you said they came from: out of nowhere. I think they're just like Olevia and are a marketing company that sells low end no-name TV's with their no-name on them for low end prices in huge volumes. Another example where price wins over quality in the marketplace (which is why I think HD disc format will 'win' -- the market loves cheap stuff if it's "adequate"). And I don't mean this in a bad way, I've a 32" Olevia HDTV in our bedroom, wouldn't buy one for the living room, but for a bedroom it's fine despite it's rough edges.

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