Just a week after rival Lenovo announced it is buying Packard Bell to expand its presence in the European market, Acer has outsmarted Lenovo by acquiring Gateway, which has first right of refusal to buy Packard Bell.

When Gateway bought eMachines in 2004, it also obtained an option that meant that if anyone ever tried to buy Packard Bell, the deal had to be approved by Gateway first. If Gateway didn’t like the deal, it could step in and buy it out from under whoever was making the offer. This option came about because John Hui, Packard Bell’s largest shareholder, was also the founder of eMachines.

Gateway has announced its plans to exercise its option, according to InfoWorld, which means that Acer will in effect buy two companies, both Gateway and Packard Bell.

“The acquisition of Gateway and its strong brand immediately completes Acer’s global footprint, by strengthening our U.S. presence,” J.T. Wang, chairman of Acer told Purchasing.com.

“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.”

Acer and Gateway hope to complete the deal before the end of the year, pending antitrust clearance from regulators in the US, Europe and other jurisdictions. Acer agreed to buy Gateway for $710 million. The company will pay $1.90 in cash for each outstanding share of Gateway stock.

“This will now bring Lenovo and Acer into head-to-head competition globally,” IDC analyst Kitty Fok told Reuters.

The merger would create a multibranded PC company with more than $15 billion in revenue and at least 20 million PC units shipped each year, Acer said.

According to the market research company, Gartner, the acquisition placed Acer with an 8.8 percent share of the worldwide PC market in terms of unit shipments, followed by Lenovo with 7.9 percent. Acer alone held a global market share of 7.1 percent.

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Entry was posted on Monday, August 27th, 2007 at 4:06 pm under Technology.

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