Acer ‘overpays’ for Gateway
p2pnet news | Product News:- Taiwanese PC maker Acer seems set to become the new owner of America’s Gateway.
“The deal carries hallmarks of earlier acquisitions, such as Chinese rival Lenovo’s successful 2004 purchase of IBM’s PC business, or the more recent debacle that was BenQ’s takeover of Siemens’ mobile handset business,” says the Financial Times, going on:
As with Lenovo, Acer appears to have paid up handsomely in order to secure a brand and market share. Acer’s offer represents a near-60 per cent premium to Gateway’s undisturbed share price. In an industry where scale is crucial, the deal returns the Taiwanese group to the number three slot, ahead of its Chinese rival. Added muscle – the combined company would ship more than 20m PCs a year, giving a market share of 8.8 per cent according to research consultancy Gartner – means cheaper component parts.
But Acer is overpaying for the $710 million acquisition, says an analyst quoted by Bloomberg News.
“The buy would allow Acer to overtake Chinese rival Lenovo Group Ltd. by adding customers in Europe and the U.S. Acer yesterday reported second- quarter profit dropped 36 percent after Lenovo won customers,” says the story.
It has Daniel Chang, an analyst at Macquarie Securities, writing in a report that Acer is “wasting its cash bullets” in an “overly priced” takeover.
Also See:
Financial Times – Acer buys Gateway, August 28, 2007
Bloomberg News – Acer Shares Fall by Daily Limit on Gateway Purchase, August 28, 2007
Use free p2pnet newsfeeds for your site. It’s really easy!
Subscribe to p2pnet.net | | rss feed: http://p2pnet.net/p2p.rss | | Mobile – http://p2pnet.net/index-wml.php
Net access blocked by government restrictions? Use Psiphon from the Citizen Lab at the University of Toronto. Go here for details. Download here.
