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Acer Buys Gateway, Shocks Lenovo
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    Table of Contents:
  • Acer Buys Gateway, Shocks Lenovo
  • Lenovo to Lose Packard Bell
  • Acer’s Many Arms
  • Acer and Gateway: the Analysts Weigh in

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    Acer Buys Gateway, Shocks Lenovo

    (Page 1 of 4 )

    Both Acer and Gateway denied the rumors of a purchase as late as March of this year, but yesterday’s announcement changed all that. Acer’s purchase of the US computer maker should spark a battle for the number three position in the market both locally and globally. In this article, we look at the ramifications.

    It doesn’t hurt to start with the numbers. Acer offered $710 million for Gateway, in a deal that values Gateway stock at $190 per share – not bad, considering that Gateway’s stock closed Friday at $1.21 per share. It’s kind of sad, really, when you consider that Gateway stock was trading at $81.50 back in 1999 before the dot.com crash, but I digress.

    The combined company will boast more than $15 billion in revenues and shipments in excess of 20 million units per year. It will command nearly nine percent of the global PC market. How does that measure up against the other major computer makers? Well, it bumps Lenovo down to number four with just under eight percent of the market. But Dell sold 39.1 million units worldwide, while HP sold 38.8 million units.

    With the combined Acer-Gateway a distant third in both the US and worldwide global markets, you can bet that neither Dell nor HP will be sweating too much over the deal. In fact, it’s worth looking at what Michael Dell said about another combination of computer hardware makers a little less than three years ago. In reference to Lenovo’s purchase of IBM’s PC business, Dell observed that “We’re not a big fan of the idea of taking companies and smashing them together. When was the last time you saw a successful acquisition or merger in the computer industry? It hasn’t happened in a long, long time…I don’t see this one as being all that different.”

    Interestingly, Lenovo is the one major computer maker who IS likely to be sweating over this deal. The China-based company just lost its number three position to another Asian computer maker – one who effectively bought market share in the lucrative US arena (more on that in a bit). Lenovo hoped to establish itself in the US after the IBM deal. But there’s more going on here than this simple loss.

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