Acer will purchase all the outstanding shares of Gateway for $1.90 per share. The acquisition has been unanimously approved by the boards of directors of both Gateway and Acer. Assuming government approval under Hart Scott Rodino, the acquisition is expected to close by December 2007.

Acer has acquired Gateway, the fourth largest PC company in the United States, for $710 million. The acquisition will create a company with over $15 billion in revenues and shipments in excess of 20 million PC units per year.

Under the terms of the agreement, Acer will purchase all the outstanding shares of Gateway for $1.90 per share. The acquisition has been unanimously approved by the boards of directors of both Gateway and Acer. Assuming government approval under Hart Scott Rodino, 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 acquisition of Gateway and its strong brand immediately completes Acer’s global footprint, by strengthening our US presence,” said J.T. Wang, Chairman of Acer. "Upon acquiring Gateway, we will further solidify our position as number three PC vendor globally."

Gianfranco Lanci, President of Acer, added, “Both Acer’s and Gateway’s geographical presences and product positioning are highly complementary. We believe that our combined scale will lead to significant efficiencies. In time, we intend to actively manage our brand portfolio and differentiate our brands to address different consumer segments. We are also acquiring a world-class team and Gateway’s employees will be critical to our combined success.”

“We believe our complementary geographical and product mixes, and our mutual focus on the consumer market makes Acer an outstanding partner for Gateway.” explained Ed Coleman, CEO of Gateway. “Joining with Acer will enable us to bring even more value to the consumer segments we serve and capitalize on Acer’s highly regarded supply chain operations and global reach to expand the scope of the Gateway and eMachines brands around the world."

The combination of Acer and Gateway 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. 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.