Acer Wants Gateway

Acer announced today its intentions of buying the hardware manufacturing company Gateway, the fourth largest computer producer and vendor in the United States. The definitive agreement between Acer and Gateway will lead to a better market position in the U.S. for Acer and it will create a multi brand company with revenues that top $15 billion and unit shipments in excess of 20 million per year.

In order to complete the purchase of the Gateway company, Acer will offer to buy all available Gateway shares at a price of $1.90 per share, which adds up to a total price of around $710 million. The merging of the two computer manufacturing companies was met with approval by the executive boards from both Acer and Gateway and the whole process is expected to close by the end of the year. Acer might not be able to acquire the Gateway company and all its divisions as there are negotiations going on concerning the sale of the Gateway's Professional business to a third party.

"This strategic transaction is an important milestone in Acer's long history" said J.T. Wang, Chairman of Acer, who was cited in a company press release. "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." The merging of the two companies is expected to result in increased revenues and lower production costs as well as a considerable increase in scale of production and sells. As the two companies are currently activating in the same general market, the merging will enable them to leverage their clients demands and cross sale a number of products.

According to Gateway's president and chief executive officer, Ed Coleman, the merging will allow both Acer and Gateway to expand on a wider area and more importantly it will allow Gateway an easy access to a better hardware parts supply chain a greater penetration of the global computer market. Gianfranco Lanci, President of Acer, also said that in time there are plans to separate the products of the two companies in order to serve different computer markets, but for the time being both producers will continue to manufacture and sell their own branded PCs.

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