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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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By 16nm on 8/27/2007 12:15:25 PM , Rating: 1
Gateway’s announcement that it would enter the Chinese PC market with desktop and notebook computers

Can the Chinese even afford to buy computers??? They can only afford $2 for Windows XP. How much is the hardware going to cost, $4??? How much money is there to be made in that market?

By Loc13 on 8/27/2007 3:43:53 PM , Rating: 2
Yes they can. If they don't have the hardware, how do they play the $2 software? Just think about all those WOW players from China!!

I just recently purchased a budget line Acer 24inch monitor. Can't say they're great compared to the Dell I use at work, but it's excellent for the price.

By Yongsta on 8/30/2007 2:56:49 PM , Rating: 2
20% of china population (1.3 billion) is "middle class" average salary of $40,000 US so I would say yes. And that figure is only going to increase.

By Yongsta on 8/30/2007 3:02:12 PM , Rating: 2
I'm getting my statistics from Chinese Academy of Social Sciences (CASS). Also in 10 years estimates of up to 50% of china's population will be "middle class". So that's whats intriguing for businesses, 650 million people with a lot of purchasing power. As for Acer, I bought an Acer AL2051W LCD monitor and it is great. I had an Acer notebook and PC before (10 years ago) and had no problems.

By Yongsta on 8/30/2007 3:05:36 PM , Rating: 2
It would be nice to have an edit function. I just read CASS determination of middle class is at least annual income of $10,000 and own assets at least worth $40,000.

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