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Last Updated: Monday, 27 August 2007, 11:59 GMT 12:59 UK
Acer to acquire Gateway for $710m
Gateway factory
The takeover is expected to be completed by December
Taiwan's leading computer seller Acer is to take over US PC maker Gateway in a $710m (352m) deal.

The takeover will create the world's third largest producer of personal computers, with shipments of more than 20 million PCs and sales of $15bn.

The deal may also see Acer try to block Chinese rival Lenovo from buying Packard Bell's operations in Europe.

Gateway has said it wants to buy Packard Bell under a 2006 first refusal deal agreed with its owner, John Hui.

"This acquisition of Gateway and its strong brand immediately completes Acer's global footprint by strengthening our US presence," Acer chairman JT Wang said.

"This will be an excellent addition to Acer's already strong positions in Europe and Asia."

The two firms said they expected the deal to result in "significant" cost savings of more than $150m. In addition, the deal should lead to a drop in component costs, Acer and Gateway said in a join statement.

Analysts predict that Acer will back Gateway's intention to exercise its first refusal deal with Packard Bell in order to scupper Lenovo's expansion plans.

Lenovo had been hoping to boost its European market position by snapping up the Dutch firm.

However, some analysts have said that Lenovo may not lose out to Gateway, but merely be forced to pay more for Packard Bell.

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