Taiwanese company Acer Inc., a leading world PC maker, announced today it has entered into a definitive agreement to acquire US company Gateway Inc. Gateway is the fourth largest PC company in the US and a leading retail PC provider. The combination will create a multi-branded PC-company with over US$15 billion in revenues and shipments in excess of 20 million PC units per year.
Under the terms of the agreement, Acer will commence a cash tender offer to purchase all the outstanding shares of Gateway for $1.90 per share, which represents total equity value consideration of approximately $710 million. The acquisition is expected to close by December 2007.
Gateway earlier announced that it intends to exercise its Right of First Refusal to acquire from Lap Shun (John) Hui, all of the shares of PB Holding Company, S.ar.l, the parent company for Packard Bell BV - a leading European PC vendor based in France. In addition, Gateway is currently in discussions with a third party with regards to a sale of its US based Professional business.
The deal enables Acer to overtake Chinese PC maker Lenovo Group as the world's No. 3 vendor of personal computers. Gateway signal on Packard Bell is a confirmation of its intention to obstruct Lenovo's plans to acquire Packard Bell.
"This strategic transaction is an important milestone in Acer's long history" said J.T. Wang, Chairman of Acer. "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."
Gianfranco Lanci, President of Acer, added, "Both Acer's and Gateway's geographical presences and product positioning are highly complementary. We believe that our combined scale will lead to significant efficiencies. Gateway has built one of the industry's most powerful and unique brands and with this acquisition, we will have the opportunity to implement an effective multi-brand strategy and cover all the major market segments. In time, we intend to actively manage our brand portfolio and differentiate our brands to address different consumer segments. We are also acquiring a world-class team and Gateway's employees will be critical to our combined success."
"We believe our complementary geographical and product mixes, and our mutual focus on the consumer market makes Acer an outstanding partner for Gateway." explained Ed Coleman, CEO of Gateway. "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. Acer has made impressive strides in the global PC market and the board and I welcome this merger."
