Acer to Buy Gateway in $710 Million Deal

Two of the world's biggest PC makers announced their agreement to merge on Monday, with Acer purchasing Gateway for $710 million in cash. At this time, Acer is the fifth largest PC maker in the world, while Gateway is number four; the acquisition will push Acer ahead of Lenovo, which was previously the third largest PC maker. Only HP and Dell command more market share worldwide than the combined Acer and Gateway.

"This strategic transaction is an important milestone in Acer's long history" said Acer chairman J.T. Wang. "The acquisition of Gateway and its strong brand immediately completes Acer's global footprint by strengthening our US presence. This will be an excellent addition to Acer's already strong positions in Europe and Asia. Upon acquiring Gateway, we will further solidify our position as number three PC vendor globally."

Previous to the purchase, Acer controlled about 5.2 percent of the market worldwide for PCs, while Gateway controlled 5.6 six. That said, Acer has been on a solid trend lately, with strong gains in both the notebook and desktop PC markets. Gateway, meanwhile, has fallen on tough times after a strong run a decade ago, and has been losing market share. Acer said will continue selling PCs under the Gateway brand in the US.

In related news, Chinese PC giant Lenovo, which sells the popular line of ThinkPad notebook computers, is reportedly in talks to purchase European-based Packard Bell in a bid to increase its presence with consumers in Europe. Packard Bell is a tiny PC maker, however, and would not provide enough sales for Lenovo to capture the number three spot.