Taiwan-based computer manufacturer Acer has some big plans to storm the top tiers of global PC companies with its announced acquisition plans of Gateway. Gateway, for those who don't remember, is based in Irvine, California, but started out on a farm in the Midwest.
The acquisition plans call for Acer to purchase all outstanding shares of Gateway at $1.90 a share, putting the net total of the proposed merger at approximately $710 million. The Acer/Gateway plan, pending all the usual standard closing conditions on a deal of this size, could be done by the end of the year.
The proposed behemoth which would emerge from this deal, said the two companies, would be the third largest PC company in the world with over US$15 billion in revenues and shipments in excess of 20 million PC units per year. It would be further enhanced overseas by the acquisition of the Packard Bell brand, which seems to be pretty popular still over in Europe. This is all on top of a possible sale of Gateway's professional business arm and continued low level operations of Gateway's eMachines brand.
So - we have four computer brands, a possible dropping of a business division and a global level operation in the making. What does this all mean? For average consumers in the United States you can probably expect to see slightly lower prices on average PCs sold at retail as competitors like HP develop new strategies and price points to ward off potential challenges from a perhaps reinvigorated Gateway brand.
For Gateway, it goes without saying that this once proud brand has not done well in recent years, seeing both market share and stock prices fall. Acer, a well liked brand overseas, has been slow in gaining US market share and will, despite lagging Gateway sales, still find itself becoming quite strengthened in both the domestic and global consumer computer markets.
Comments from Ed Coleman, CEO of Gateway, show where the Gateway brand might be heading after the merger is done:
"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 to expand the scope of the Gateway and eMachines brands around the world."
Gateway - a global player? It seems a strange thought to think but with Acer's established global placement it could well make the American cow brand a staple in select countries around the world. Got Gateway?