Acer Inc. (TWSE:2353), one of the world’s leading branded PC vendors, announced today it has entered into a definitive agreement to acquire Gateway, Inc. (NYSE: GTW).  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 has been unanimously approved by the boards of directors of both Gateway and Acer and is subject to standard closing conditions, including approval under Hart Scott Rodino, Exon Florio and similar laws outside the U.S.  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 U.S. based Professional business. 

“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.” 

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