One of the most talked about potential computer deals of the year finally happened: Taiwanese computer maker Acer Inc. is set to pay $710 million for Irvine-based Gateway Inc.’s business selling computers through stores and online.
Acer said Monday it is offering $1.90 per share for Gateway, 57% more than what Gateway shares were trading at on Friday.
Gateway’s stock soared more than 50% early Monday with a market value of about $675 million.
The company, which has struggled to compete selling computers, saw its stock drop down more than 90% since its 1999 peak.
Industry watchers have long speculated that Gateway’s only hope was to be bought out by a larger Asian rival.
Gateway’s known brand and retail business are likely attractive features to Acer, according to Morningstar Inc. analyst Rick Hanna.
Acer was pegged as a likely suitor when earlier this year it announced it was looking to get a foothold among U.S. consumers.
With Gateway under its belt, Acer is set to have about $15 billion in sales and ship more than 20 million computers a year, Acer said in a statement.
The deal gives Acer a boost among the world’s top computer makers.
Gateway is likely to help Acer pass its biggest rival, China’s Lenovo Group Ltd., and land the No. 3 spot worldwide.
The deal was unanimously approved by the boards of directors of Gateway and Acer and is expected to close in December.
Separately, Gateway said it is in talks with another buyer looking to acquire the company’s business selling computers to the government and businesses.
Acer’s buy of Gateway could close by year’s end pending regulatory approvals in Taiwan and the U.S.
