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Gateway says no immediate OC impact

August 27th, 2007, 11:05 am · 1 Comment · posted by

Gateway officials aren’t saying much more than what was said in today’s press release and 4 a.m. conference call on the announcement that Taiwan rival Acer will buy the Irvine computer company for $710 million.

But a few key details from the call and analysts:

Present on the call: J.T. Wang, Acer Chairman; Gianfranco Lanci, President of Acer; and Ed Coleman, Gateway’s CEO.

  • Gianfranco Lanci spoke the most, detailing reasons for the combination, plus revenue and computer unit numbers, market share and savings. More details will be presented in the next 10 days.
  • Gateway has spent the better part of the past year or so improving its customers service and bringing its support staff back to the United States. The combination, said Lanci, offers “a premium to Gateway shareholders and a bright future for Gateway employees.”
  • Somehow, Acer will save $150 million by combining the two companies. There was no mention on whether employees would be affected but Lanci said the savings would come from the usual combination of synergies in customer service, supplies and organizing.
  • Acer vows to keep all three brands — Acer, Gateway and eMachines — intact. The three brands will likely hit different price points. eMachines is best known for lower prices, while Gateway or Acer could be the premium brand in the U.S.
  • Acer sold 13,992 computers in 2006. Gateway sold 5,004.
  • Combined, the companies generated $15 billion in revenue last year and hold a solid number 3 position in PC sales worldwide.
  • Lanci predicted that in the next 12 months, the combined company can sell 25 million computers and become the second biggest seller of notebook computers.
  • One interesting Gateway strength: Monitors, which Acer plans to continue to build on.
  • Gateway’s ongoing option to buy Packard Bell, which is owned by former eMachines owner John Hui, is still moving ahead. As are talks with another company to sell Gateway’s professional and business unit.
  • Regardless of the last point, Acer’s intention and its $710 million offer is to buy all of Gateway.
  • Since both Acer and Gateway’s boards agreed to the sale, if something else should happen, there is a break-up fee of $21.3 million, or 3 percent of the purchase price.
Posted in: Computers
 
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