Irvine, Calif. — Acer has entered into a definitive agreement to acquire Gateway for about $710 million.
The deal, announced this morning, has the Taiwan-based Acer purchasing all outstanding shares of Gateway for $1.90 per share. Both company’s boards have approved the deal, but it still must pass Federal anti-trust measures. The transaction is expected to be completed by December.
Gateway was the third-largest shipper of PCs for the second quarter, with 6.1 percent of the U.S. market, according to Gartner. Acer was fourth with 5.6 percent.
The merger is expected to create a cost saving of about $150 million. Full details have not been revealed, but initial reports indicate the newly combined company will retain the Gateway and eMachines brands and help further expand their international penetration.
Gateway is also holding talks with an as-yet-unnamed third party to purchase its professional computer business.
The acquisition marks the end of a tumultuous three-year run at Gateway that saw the company reject a takeover offer in August 2006 when eMachines' founder and a current large Gateway stockholder Lap Shun Hui attempted to purchase Gateway's retail business for $450 million.
Next the company endured an attempt by Scott Galloway, CEO of the investment firm Firebrand Partners and a significant Gateway shareholder, to take over its board of directors. This chapter concluded in December 2006 with Galloway being placed on Gateway’s board and the company naming an additional board member with Galloway’s approval.