By Lisa Kerner
Charlotte, N.C., Aug. 27 - Acer Inc. will acquire Gateway, Inc. in a $710 million deal to create a "multi-branded PC-company" with more than $15 billion in revenues and shipments in excess of 20 million PC units per year, it was announced on Monday.
Under the companies' merger agreement, Acer will begin a $1.90-per-share cash tender offer for all the outstanding shares of Gateway. The boards of both Acer and Gateway have unanimously approved the transaction, which is expected to close by December.
Pre-tax synergies as a result of the merger are expected to be at least $150 million.
Gateway intends to exercise its right of first refusal to acquire all of the shares of PB Holding Co., Sarl, the parent company for Packard Bell BV, from Lap Shun (John) Hui. The company is also in discussions with a third party regarding a sale of its U.S.-based professional business, Gateway stated in its news release.
"The acquisition of Gateway and its strong brand immediately completes Acer's global footprint, by strengthening our U.S. presence," Acer chairman J.T. Wang said in the release. "This will be an excellent addition to Acer's already strong positions in Europe and Asia."
"We believe our complementary geographical and product mixes, and our mutual focus on the consumer market makes Acer an outstanding partner for Gateway," Gateway CEO Ed Coleman added. "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."
Citigroup Global Markets Inc. acted as exclusive financial adviser to Acer, and Goldman, Sachs & Co. was exclusive financial adviser to Gateway.
Acer is a branded PC vendor based in Taipei, Taiwan.
Gateway is an Irvine, Calif., PC company.
| Acquirer: | Acer Inc.
|
| Target: | Gateway, Inc.
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| Transaction total: | $710 million
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| Price per share: | $1.90
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| Announcement date: | Aug. 27
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| Expected closing: | By December
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| Stock price for target: | NYSE: GTW: $1.21 on Aug. 24
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