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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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The future is coming!
By DeepBlue1975 on 8/27/2007 9:56:35 AM , Rating: 2
Yeah, that future where all we'll have will be a single couple of monster companies that will be at the same time OEMs / CPU / VGA / motherboard / home appliances / car / furniture / avionics / burger makers throughout the whole world.
Competition by then will mean a one on one dispute, and the winner will have enough power to change antitrust laws and buy the looser.

The good thing about that is that the question "where do you work?" will turn into "Do you work at Godlike Corp. 1 or at God Corp. 2?

RE: The future is coming!
By Misty Dingos on 8/27/2007 10:51:08 AM , Rating: 2
BTDT (Been There Done That)

Mega-corps are the boogey men of the 21st century. Corporations that have so much power they are defacto governments. But like so many of the boogey men of the past they are and are likely to remain nothing but stories to frighten the children at night.
When the US (and I am certain other countries) broke up the monopolies of the 19th century it was to ensure that the abuses that occurred then would not occur again. Even everyone’s favorite monster MicroSoft operates under such scrutiny that even if it tried to start pushing any government around it would soon find that being broken up. And being broken up is simple and effective way for the consumer (through the government and courts) to exact retribution.

I don’t fear the mega-corp because they just aren’t going to be a reality. At least not in the Sci-Fi fan’s or corporate conspiracies freaks form.

RE: The future is coming!
By stromgald on 8/27/2007 12:01:18 PM , Rating: 2
Ditto, I think all the Microsoft monopoly hate is overblown. Because of their business, they really can't exert that much influence over their suppliers and customers could turn to Apple, Linux, etc (albeit unlikely). Despite the escalating price of operating systems, they haven't really been abusing their power.

I'm more worried about Wal-mart and their business practices in influencing industries higher along their supply chain than Microsoft. Microsoft is just a more high profile case and people like to jump on them all the time.

By ObscureCaucasian on 8/27/2007 12:45:58 PM , Rating: 2
The nature of the OS business makes monopolies better for the consumer in some aspects. Compatibility was much easier with one OS, as was problem solving. With technology these days software is progressing towards being platform independent. Microsoft has actually been helping out a ton is this aspect with their .NET technologies. Sure they haven't released a framework for Mac or *nix, but how much help do you want them to give the competition. Projects like Mono won't advance as fast as a MS one, but 5 or 10 years down the road, many programs will run independent of platform.

RE: The future is coming!
By TomZ on 8/28/2007 12:46:07 AM , Rating: 1
Despite the escalating price of operating systems, they haven't really been abusing their power.

The price of Windows has actually remained quite constant for the past 10 years or so. This supports your argument a little more.

RE: The future is coming!
By marvdmartian on 8/27/2007 11:12:33 AM , Rating: 2 in Demolition Man, where every restaurant is....... TACO BELL!!! LOL

RE: The future is coming!
By vhx on 8/27/2007 2:36:04 PM , Rating: 2
Just wait for the real world Umbrella Corporation. That'll be interesting.

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