Acer to Acquire US-Based Gateway

08-27-07, 06:35 AM

Acer, one of the world's leading branded PC vendors, announced today it has entered into a definitive agreement to acquire 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 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.

The combination of Acer and Gateway is expected to result in significant revenue and cost synergies. The considerable increase in scale will result in reductions in per unit procurement and component costs for both companies. This combination also creates a real opportunity for the cross-selling of product portfolios by leveraging the customer relationships of both Acer and Gateway. Significant savings are also expected through the increased efficiency of the combined back-office functions. The pre-tax synergies are expected to be at least $150 million. In addition, this transaction is expected to be accretive to Acer's earnings per share in 2008 without synergies.

A joint teleconference call and webcast hosted by Acer and Gateway will be held today at 7:30AM New York time / 4:30AM Pacific Time to discuss this transaction. The call may be accessed US toll free by dialing 1-800-219-6110. Acer will also offer a slide presentation to be viewed in conjunction with the live webcast and will be accessible from the company's website at http://www.Acer.com. A telephonic replay of the conference call will be available through midnight Pacific time on Monday, September 3, 2007, by dialing US toll free 800-405-2236. Callers outside the US and Canada may access the replay by dialing 303-590-3000. The passcode to hear the replay is 110-96-467.

Source: Gateway press release

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psionandy · 08-27-07, 06:46 AM

I'd forgotten that gateway were still going.. after they pulled out of europe around 2000? Shutting down that large factory in the Republic of Ireland just after Clinton visited

**hyedipin** · 08-27-07, 09:47 AM

wow, wasn't there another news with this same one, I tried to post comments, it kept saying invalid link.. I think it was removed when I was posting.. ??

here is my comment

I would feel much more comfortable with Acer then with Gateway. Acer has been huge, and very successful in Europe for years, and gateway has been nothing but. It has been overall a failure in busy states, where they lost a great deal with their retail stores. I know for a fact that they lost $10k a month plus salaries and expenses at one of their stores here in East 86th street.

Good luck to Acer, and I hope they become another great PC manufacturer here in the states following Dell, HP and Toshiba. I hope they would completely take over.

spunker88 · 08-27-07, 08:52 PM

My first win98 pc was a gateway. After a few upgrades, its still running fine, after almost 10yrs! That is good quality. It will probably outlive my xp pc.

Of course the gateway cost over $1000, but that was cheap back then for a pc.