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Acer-Gateway deal is valued at $710 million USD

There is big news out of the computer world today. Acer today announced that it has reached a definitive agreement to purchase U.S.-based Gateway, Inc. Gateway is currently ranked as the fourth largest PC manufacturer in the U.S. with shipments of over 20 million PCs per year.

The acquisition is estimated to be valued at $710 million USD ($1.90 per share) and is expected to be finalized in December 2007.

"This strategic transaction is an important milestone in Acer's long history" said Acer chairman J.T. Wang. "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 number three PC vendor globally."

"Joining with Acer will enable us to bring even more value to the consumer segments we serve and capitalize on Acer's highly regarded supply chain operations and global reach to expand the scope of the Gateway and eMachines brands around the world," remarked Gateway CEO Ed Coleman.  "Acer has made impressive strides in the global PC market and the board and I welcome this merger."

From statements made by representatives for both companies, it appears that the eMachines brand -- which Gateway acquired 2004 for roughly $262 million USD -- and Gateway brand will live on under Acer's massive wings. The retention of the brands also means that Gateway will likely continue to flaunt its "cow heritage" much like the Chick-fil-A restaurant chain.

Almost exactly one year ago, it was reported that John Hui offered $450 million USD to purchase Gateway's retail division. The bid, however, was never accepted by Gateway. "I am very disappointed that Gateway has chosen not to constructively engage in discussions with me and my advisors on the proposal that I sent to you on Aug. 3," said Hui in August, 2006. "I believe that management and the board need to adopt a sense of urgency to address Gateway's problems."

The news of Acer’s acquisition comes just weeks after Gateway’s announcement that it would enter the Chinese PC market with desktop and notebook computers.

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RE: Wow..
By SexyK on 8/27/2007 9:43:48 AM , Rating: 3
I remember when Gateway was Gateway 2000... that naming scheme sorta went out of style with the 1900's though. At least they are keeping the cows!

RE: Wow..
By AmberClad on 8/27/2007 9:49:29 AM , Rating: 2
I actually haven't seen much of the cows lately (or any Gateway advertising for that matter). Maybe they do need to work on reinforcing the brand image. Animal mascots can work great (Aflac, Geico, Linux, etc).

RE: Wow..
By euclidean on 8/27/2007 12:59:33 PM , Rating: 1
More like it was due to everyone finding out they used recycled parts and tried playing them off as new...that and Dell coming out pretty much sent them packing....then the Emachine era that I thought destroyed the name....though they came back pretty strong the last couple years...great laptops. I wonder how they'll hold up now...

RE: Wow..
By 440sixpack on 8/27/2007 6:36:46 PM , Rating: 2
Yep, my first PC in 1994 was a Gateway 2000 486DX2-66, and my second was a Gateway PIII-550 in 1999. Don't buy premade ones anymore but I always enjoyed the cow theme, adds a little whimsy to an often times far too serious business.

"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan

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