Taiwan’s Acer Inc. has acquired nearly all shares of Irvine computer maker Gateway Inc. with the $710 million deal set to close Tuesday.
Gateway’s shares, which have a market value equal to Acer’s offer, are set to stop trading on the New York Stock Exchange today.
The deal is set to make Acer the No. 3 PC maker after Hewlett-Packard Co. and Dell Inc.
The acquisition ends Gateway’s colorful run as an independent maker of PCs.
The company got its start in 1985 on the Sioux City, Iowa, family farm of founder Ted Waitt.
Gateway, which later moved to North Sioux City, S.D., grew to be one of the largest PC makers with a quirky marketing motif that played off the company’s roots in the American Plains.
By the late 1990s, the company was struggling to keep its place in the computer market against HP and Dell.
In 1998, Gateway moved to San Diego, Waitt’s adopted home. Three years later, it moved to the north San Diego County city of Poway.
In 2004, the company paid $266 million for Irvine’s eMachines Inc., a seller of discount PCs. In a twist, Wayne Inouye, eMachine’s turnaround chief executive, ended up running Gateway and brought the company to Orange County.
Inouye made gains by stressing sales through big electronics retailers. He was ousted in early 2006, after Gateway’s directors decided he wasn’t doing enough to bolster sales directly to businesses, schools and consumers.
After months without a permanent chief executive, in late 2006 Gateway named Ed Coleman, a longtime technology executive, as its boss.
Gateway has made little progress selling directly to businesses and others in the past year. Sales through stores continue to be its main source of business.
Talk about an Acer buyout of Gateway has dominated for the past year or so. Many company watchers saw an acquisition as Gateway’s only hope for survival.
