Acer completes Gateway share purchase
- 12 October, 2007 08:37
Acer has acquired over 90 percent of outstanding shares of Gateway, paving the way for completion of the deal.
The Taiwanese company announced in August a plan to buy US PC vendor Gateway for around US$710 million through a tender offer for the company's shares. Late this week, Acer announced that an investment subsidiary set up to buy Gateway stock had finished the tender offer, and would soon finalise the deal.
The companies will formally merge within the next few days, and the deal will be closed by October 16, Acer said in a statement. Gateway's stock will cease to trade on the New York Stock Exchange by that date.
The Acer-Gateway deal, and a pending arrangement for Gateway to buy European PC vendor Packard Bell, will put the Taiwanese company in a position to challenge Hewlett-Packard and Dell for U.S. market share, while blocking rival Lenovo Group from gaining ground in Europe through its planned purchase of Packard Bell, analysts say.
Gateway will continue to operate under its own name as a subsidiary of Acer, and the company expects to expand its product offerings.
Acer said it was gratified by the enthusiasm in which Gateway employees and clients have reacted to the acquisition.
In a separate statement, Acer said it borrowed US$607.2 million from Citibank, part of Citigroup, for use in the Gateway purchase.