ACER TO BUY GATEWAY

From USA Today:

Taiwan's Acer will buy Gateway for $710 million, creating the world's No. 3 PC maker and doubling its U.S. presence while dealing a blow to rival Lenovo's efforts to grow in Europe.

Lenovo's plans were set back when Gateway said Monday that it would exercise its right to take a first attempt at buying the parent of European-focused PC maker Packard Bell.

The Chinese PC giant has said it was in talks to buy Paris-based Packard Bell, hoping to expand its presence in a European consumer market where it is relatively weak.

Acer said the merger would create a company with more than $15 billion in sales and 20 million PCs shipped per year, adding it would keep the Gateway brand in the United States.

On a worldwide basis, the tie-up would help Acer — Taiwan's most recognized global brand — displace Lenovo.

Lenovo — one of a handful of Chinese firms trying to forge a global brand by investing abroad — dropped to global fourth place in the first three months of 2007 but has now reclaimed the No. 3 slot from Acer in a closely fought battle.

The deal is expected to be completed by December and the merged company would still be a distant third in the United States, behind No. 2 Hewlett-Packard at 23.6% and market leader Dell at 28.4%, according to IDC.

A merged Acer and Gateway would have sold about 18.6 million PCs worldwide last year, or about 8% of global sales, compared to Dell's 39.1 million units, Hewlett-Packard's 38.8 million and Lenovo's 16.6 million, according to IDC.