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Taiwan's Acer Plans to Acquire Gateway

By ANNIE HUANG,

Posted: 2007-08-27 08:01:26

TAIPEI, Taiwan (Aug. 27) - Acer Inc. plans to acquire U.S. computer maker Gateway Inc. for $710 million in a deal that will push the Taiwanese company past China's Lenovo Group as the world's third largest vendor of personal computers.

Acer said Monday it is offering to buy Gateway for $1.90 per share in a deal expected to close by December, pending regulatory approvals in Taiwan and the U.S.

The offer price amounts to a premium of 57 percent to Gateway's Friday closing price of $1.21. Gateway traded at $81.50 in 1999.

The acquisition has been unanimously approved by the boards of directors of both Gateway and Acer and is subject to standard closing conditions, it said.

The deal will create a multi-branded computer company with over $15 billion in revenues and shipments in excess of 20 million units per year, Acer said in the statement.

"This strategic transaction is an important milestone in Acer's long history," said J.T. Wang, Acer's chairman, in the statement. "This will be an excellent addition to Acer's already strong positions in Europe and Asia."

Acer President Gianfranco Lanci said the acquisition will allow Acer to implement an "effective multi-brand strategy and cover all the major market segments."

The takeover will result in reductions in per unit procurement and component costs, and also create an opportunity for the cross-selling of product portfolios, he added.

Ed Coleman, chief executive of Gateway, welcomed the buyout.

"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," he said in the statement.

In the second quarter, Acer was the world's fourth-largest PC maker behind U.S.-based Hewlett-Packard, No. 2 Dell, and third-ranked Lenovo Group Ltd. of China, according to research company Gartner Inc. Irvine, California-based Gateway is the third-largest PC vendor in the U.S. by market share after Hewlett-Packard Co. and Dell Inc.

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

"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 adviser for Acer, while Goldman Sachs Group Inc. is acting as the financial adviser for Gateway.

Copyright 2008 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. All active hyperlinks have been inserted by AOL.

2007-08-27 08:01:26

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26 comments

hondabuck 05:19:00 PM Aug 27 2007

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I DONT HAVE A COMPUTER, JUST A BOX OF PARTS UNER MY DESK

guitarrocker1951 03:01:33 PM Aug 27 2007

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ACER IS A PIECE OF SHIT JUNK.

mcjgarcia 02:01:00 PM Aug 27 2007

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I purchased an Acer and it has turned out to be the worst investment I have ever made. It lasts for a week and then has to be sent off for repairs. I'm not the only one. I see other people standing in line to have their Acers worked on. What a horrible, horrible thing to happen to Gateway.l

les808 12:55:00 PM Aug 27 2007

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hey ! i am on my 2nd gateway. the one that i have now is a gm4019e and i have no problems with it. i sure wish that a Mexican company bought out gateway instead of a chinese company. did anyone notice all those Spanish chatters in chat rooms lately ? i can't wait for a Spanish chatting puter. lol, have a nice day.

jpetrie0731 12:53:18 PM Aug 27 2007

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Okay, here we go again, selling off another piece of this country. When are we going to realize that the more of this country we sell off, the more of this economy we are beginning to sell off AGAIN, AGAIN and AGAIN.
When are WE going to learn. I guess the only way we will learn is when the entire country has become owned by some other country that just doesn't give a crap about the survival of THE UNITED STATES of AMERICA.
Folks this is going to be a very hard and bitter pill to swallow when this happens to US, the(United States) once and for all. WE as a country have become to dependent on OTHERS for OUR survival. Let's get this country back the way it was and become economically strong and dependent upon OURSELVES and NO ONE ELSE.

topviewcs 12:31:23 PM Aug 27 2007

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I think a group should get together and produce an American PC, All American parts, Amerian workers, and American call centers and dump the rest. HP, Dell, IBM, they can all go to hell then. It would be a more expensive pc, but would probably work better then what we're importing, and i don't mind paying more for a pc that is American.

p271 11:50:22 AM Aug 27 2007

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We've been a Gateway customer since 1987, thru thick and thin. We watched Ted astound us and himself. We put up with what happened with "wall street guidance" and with out sourcing. WE HAVE NEVER HAD A GATEWAY PROBLEM THAT WENT UNRESOLVED FOR MORE THAN 24 HOURS. And now, when they have pulled there call center assistance back to the US and their own employees, they are (almost) a pleasure to buy from. We would have even more good things to say about them if we weren't waiting for two more weeks for a new laptop that was promised for last week.

m060327 11:19:28 AM Aug 27 2007

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Good ridance to Gateway! My first PC was a Gateway which was satisfactory for a beginner. Then their customer service went downhill progressively. I took the PC to a Gateway regional center for servicing and discovered later that the tech assigned to the job (Brian) had stolen the expanded RAM and destroyed the servicing paperwork to cover his theft. I bought a Dell PC later and am very satisfied with Dell's customer service. M060327@aol.com