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.
Some, probably most of us would prefer to see American companies like Gateway buy Acer, not the other way around.
MS really, really doesn’t want to flood the secondary market with WinXP DVDs, or they’ll kill any chance for Vista to make serious $$$. If they can force you to buy a new computer with the OS pre-loaded instead of buying a naked machine and re-installing from your XP media they make more money (and hurt the chances of alternative OSes)
Maybe if Gateway made a better product than Acer then maybe the opposite could happen..
One more thing.. Taiwan, Japan, and yes China (for the moment) is not our enemy.. We are not at war with them. What would your reaction be if a British company is buying out Gateway???
Not a big deal..
Maybe, but some of us will always buy American first. Some others apparently would just as soon work for Asian companies, so long as they feel the material products that come out are better.
Maybe if American companies made a better product at a good price the “evil” Asian companies would not be buying American companies....
Repost of #26:
Maybe, but some of us will always buy American first. Some others apparently would just as soon work for Asian companies, so long as they feel the material products that come out are better.
So I want the best bang for my buck big deal..
So there are others of us who are aware of issues bigger than our own wallets.
Suit yourself.
Doofus, it ain’t about you, it’s about America.
Yes, it allowed me to create a system restore image on two DVDs. This can't be used as a Windows install CD for Recovery Console, etc., but only to restore the machine to factory condition.
Did MS tell you they had no control over Acer’s business practices? I’m really interested in this.
MS said that the only requirement they had was that the machine be restorable in some fashion. A system restore image meets that requirement.
Acer offered to sell me another copy of Windows XP for ~$120, if I wanted a Windows install CD.
I was incredulous and furious the rest of the day.
No, it's a Microsoft problem.
MS policy allows Acer to sell Windows machines with no Windows installation media included. (I called MS to confirm this.) If their policy required the distribution of the actual media with a machine, Acer would do it.
Thans for the reply. :)
Microsoft is making the most basic mistake of business. They're doing what's best for them, not what's best for their customers. People know this, and they feel used. It's bad for your customers to feel used. The worse MS treats its customers, the more pressure there is to find an alternative.
If MS had actually listened to customers and made their experiences the best possible, customer loyalty would be so high that there would be little interest in Linux. Instead, we are made to get by with thinly-veiled fodder for future MS revenues, masquerading as useful software.
And the costsfor the included media would be passed down to all purchasers, when few actually want or need it. If you, individually, want or need it, you can buy the media from Acer at any time, but all customers shouldn't have to pay for something up front that few want.
No, you can't.
The only way to get the media from Acer is to buy another copy of Windows for ~$120. I know, because I asked.
The cost of the media is a nickel. I'd be happy, as would 99% of the rest, to spend that nickel to have the system repair and recovery tools that can only be found on the installation media.
As it is, those of us who didn't receive the media didn't really get all of Windows, did we? If the Recovery Console and Reinstall Wizard are part of Windows, then I didn't receive all of Windows.
Sorry, I’ve never had that problem, but I’ve always bought American. HP definitely offers this, or did as of 2006.
Yeah, I think Dell still sends or offers the CD too.
Trying to deal with HP on repairs for a couple of customers' computers in the past year has quickly pointed me back to Dell again. Dell has their own problems, but the others seem to have so many more problems.
If a customer won't buy a computer from me, I'll cautiously recommend a Dell.
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