14 DAY TRIAL // One of the biggest hardware acquisitions of this summer was the Acer and Gateway deal that promoted the Asian company Acer to a strong position on the computer market in the United States as it purchased the ailing Gateway, once one of the largest American computer hardware companies. While this acquisition may instill a new life in the American company, not all investors are happy with the current state of affairs as a couple of lawsuits are already on the roll.
While the Gateway investors are not directly contesting the first part of the acquisition process, they are unhappy with the sum paid by Acer for the entire company and at the same time they wish to stop the merging from advancing until Gateway gets a reevaluation of its market value. Both of the currently rolling lawsuits are registered in the United States, one in California and one in Delaware and in both of them the Gateway management is directly accused of foul play and of neglecting its duties toward the company's shareholders.
"The lawsuit alleges, among other things, that the Company's directors breached their fiduciary duties to stockholders by approving the Merger Agreement and the transactions contemplated thereby, including but not limited to the Offer, and claims that these transactions are both unfair and coercive to the public stockholders in a sale of the Company," according to one of the filings, which was cited by the news site arstechnica.
While Gateway's management agreed to the offer made by Acer as a measure of gaining access to greater financial resources, as their company was not on the best market position in the U.S., Acer was interested in the American company because it was seeking to gain a better foothold on the computer market in that region. Even is Gateway lost much of its market share to rival companies like HP and Dell while giving away its retail stores as well, it is still the third largest U.S. company in terms of market share.
Gateway's history over these last few years is marked by the acquisition of small computer manufacturing company eMachines which helped the larger company survive thanks to its small price computer systems. Another planned acquisition that was never finalized, was referring to the European company Packard Bell, which was eyed by the Asian firm Lenovo too. In the end it looks like Acer is going to get both of the companies, Gateway and Packard Bell too, while Lenovo will have to look for another method of increasing its foothold in Europe.
As a response to the investors' claims that the company should have been sold for a higher price, the management department stated that the merging with Acer will allow Gateway not only to survive but also to strive on a market where it faces increasing competition from companies like Apple, Toshiba and Lenovo.