Acer to Acquire US-Based Gateway
Acer Inc. has entered into a definitive agreement to acquire Gateway, Inc.. Gateway is the fourth largest PC company in the US and a leading retail PC provider. The combination will create a multi-branded PC-company with over US$15 billion in revenues and shipments in excess of 20 million PC units per year.
Under the terms of the agreement, Acer will commence a cash tender offer to purchase all the outstanding shares of Gateway for $1.90 per share, which represents total equity value consideration of approximately $710 million. The acquisition has been unanimously approved by the boards of directors of both Gateway and Acer and is subject to standard closing conditions, including approval under Hart Scott Rodino, Exon Florio and similar laws outside the U.S. The acquisition is expected to close by December 2007.
Gateway is currently in discussions with a third party with regards to a sale of its U.S. based Professional business.
The companies says the combination of their operations is expected to result in significant revenue and cost synergies. The considerable increase in scale will result in reductions in per unit procurement and component costs for both companies. This combination also creates a real opportunity for the cross-selling of product portfolios by leveraging the customer relationships of both Acer and Gateway.
Some significant savings are also expected through the increased efficiency of the combined back-office functions. The pre-tax synergies are expected to be at least $150 million. In addition, this transaction is expected to be accretive to Acer's earnings per share in 2008 without synergies.
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01-09-2007, 07:36 PM
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