Acer Buys Gateway And The PC Wars Heat Up

August 27, 2007 by Douglas A. McIntyre

Watch out Dell (DELL) and Hewlett-Packard (HPQ). Gateway (GTW) was bought by the third largest PC company in the world, Acer. The deal is for $710 million, or $1.90 a share, Gateway closed Friday at $1.21.

At the same time, Gateway is exercising its rights of first refusal to buy the share of the parent of Europe PC company Packard Bell. The combination of all three companies would give Acer a significant presence in Asia, Europe, and the US.

Acer rival Lenovo has been trying to buy Packard Bell, and may still make an offer.

With Dell’s global share of the PC market down to 16%, the new combined company could have a share close to 10%. With operations in three markets, it could give Dell a headache it does not need.

Douglas A. McIntyre