Posted on 08/27/2007 11:35:59 AM PDT by Abathar
TAIPEI, Taiwan - 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 representing a premium of 57 percent to Gateway's Friday closing price of $1.21, but only 2 percent of Gateway's high of $82.50 in late 1999.
Shares in Gateway increased 59 cents, or 49 percent, to $1.80 in morning trading Monday.
With the acquisition, Acer will absorb a company founded in 1985 in an Iowa farmhouse and known for packaging computers in cow-spotted boxes. Now based in Irvine, Calif., Gateway struggled in recent years amid fierce competition and had difficulty selling its products over the Internet and the phone.
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.
First radios, then televisions, vcrs, stereos, finall computers.
I beleive they make Golf components - iron and wood heads.
I’m just highlighting that another big chunk of America’s tech/electronics industry is bought out by Asia.
Acer or Wistron makes load sof stuff. Also, they make the X-Box and X-Box 360.
A-Open is their peripherals division.
(I am hard on my laptops as I drag them around everywhere. No use spending a bundle on something that will not last more than a couple of years of my banging around.)
I spent two days fixing up the hard drive; it has been pretty good ever since. Not bad for the ~$700 price tag.
My wife and I got one of the lower end Aspire models for our main home computer about 2 years ago for $500. My harddrive was partitioned the same weird way, although I have free access to the second partition and just use CD’s for the backup. If the OS goes, I’ll turn it into a linux machine and buy another dirt cheap laptop. I don’t know if I’d trust it for travel — battery life was only about 65 minutes when new.
I used Partition Magic to delete the second partition, stretch the first one to fill the whole drive then converted it to NTFS. I don't need Acer's crapware to do what Windows can already do for itself, so I uninstalled it all, including the system backup stuff.
I called Acer, then Microsoft to get the straight dope on the lack of a Windows install CD. This is the first commercial PC I have bought in over 15 years, so I had no idea how screwed up things had gotten in that time.
I still can't believe that OEMs can build and sell a computer with no O/S installation media included. I pointed out to the Microsoft guy that, by not having a Windows install CD, a large portion of their knowledgebase is useless.
All those instructions about booting to your Windows CD and running the Restore Console? Nope.
Now, the only solution to many Windows problems is to use the factory restore image to wipe out everything on my machine and put it back to the way it was delivered.
Nice, Microsoft. Great way to give your customers what they want there.
I think Gateway was selling last week for $2 bucks a share. At the height of the Dot/Com bubble it was around $170 a share...
With most pc’s these days, they give you a one time shot at creating your own media with XP on it. Did yours?
Did MS tell you they had no control over Acer’s business practices? I’m really interested in this.
Thanks.
WOW! Acer is really coming up in the world. Gateway owns E-Machine. So now Acer will own three PC brands. Acer is Taiwanese company
Obviously that’s an Acer problem, not Microsoft. FYI it’s known as an OEM version of Windows, so the distributor, Acer, decided what you got. You should have bought American, like I did, if more people had Gateway might be buying Acer instead.
China is now trying to buy Seagate, the hard drive manufacturer as well. Hopefully it will be blocked, but since they were already allowed to buy the entire IBM PC division, I doubt it.
So????
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