Acer Buys Gateway Computer

Acer Inc., the Taiwanese PC manufacturer, said early Monday morning that it is in an agreement to acquire Irvine-based Gateway, Inc. in a deal worth approximately $710M in cash. Acer said it will offer $1.90 per share for all of the outstanding shares of Gateway, in a acquisition which has been approved by both companies' board of directors. The acquisition is expected to close in December. Gateway also said this morning that it is in discussions with a third party to sell its U.S.-based professional services business, and also intends to exercise Right of First Refusal to acquire the parent firm for Packard Bell BV, which is owned by Gateway shareholder Lap Shun Hui. Gateway controls the eMachines brand of low-cost PCs. eMachines was founded by Hui and was acquired by Gateway in 2004. Gateway was advised by Goldman, Sachs & Co. in the deal; Acer was advised by Citigroup Global Markets.