Acer's Snaps Up Gateway: Vaults It Ahead of Lenovo

According to our good and great friends at the Wall Street Journal, Acer Inc.'s acquisition of Gateway Inc. for $710 million highlights the intensifying consolidation in the personal-computer business and strengthens an already fast-growing competitor against industry leaders Hewlett-Packard Co. and Dell Inc. in their home market.

The deal, announced Monday, will put Taiwan-based Acer firmly in the No. 3 spot in global PC market share by unit shipments, supplanting Lenovo Group Ltd., which itself vaulted into the global top tier two years ago by purchasing the PC operations of International Business Machines Corp. The Gateway acquisition marks a major though potentially risky step for Acer, a company that once manufactured PCs for big-name Western brands and is now buying one.

Under terms of the agreement, Acer will launch a cash tender offer for all outstanding shares of Gateway, Irvine, California, for $1.90 a share, a 57% premium to the closing price of Gateway's shares on the New York Stock Exchange Friday. The companies said the deal has been approved unanimously by the boards of both companies and is expected to close by December.

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