Gateway fans fearing that they might miss the company’s signature black-and-white dairy cow PC boxes after the company is acquired by Acer Inc. have little reason to worry: Not only does Acer plan to keep the Gateway Inc. brand just the way it is, the Taiwanese company hopes to expand it.
“A strong U.S. brand such as Gateway’s can be expanded overseas into other markets,” said Gianfranco Lanci, president of Acer, in a video feed at the Taipei news conference to announce the deal.
Acer’s determination to grow the brand should be some relief to American users. Gateway is the fourth-biggest PC brand in the U.S. and is popular among consumers. But until now, Acer has sold all of its products under its own name. Its strategy going forward is to start using multiple brands in all areas of the world, including the Gateway brand, eMachines and possibly Packard Bell. Gateway plans to buy Packard Bell BV, which would ultimately become another Acer brand once the Acer-Gateway deal is finalized. Looking ahead, Acer plans to combine the talents of each company in order to expand product offerings for users. For example, Gateway is strong in desktop monitors, where Acer is weak, so Acer will use some Gateway technology to improve its offerings, said Lanci. The two companies will see where they can share designs and technology to improve their entire desktop and laptop PC lineups, and they will expand this product cooperation to Packard Bell if a deal is made to purchase that company.
The move could also mean more PC bargains for users. Becoming larger means Acer can gain better volume discounts when negotiating with parts suppliers. In addition, competition with Hewlett-Packard Co. and Dell Inc. should remain fierce as the companies look to keep prices low.
Acer agreed to buy Gateway in an all-cash deal valued at US$710 million. The two companies combined will become the world’s third-largest PC vendor by shipments, at about 20 million desktops and laptops annually, and will transform Acer into a multi-brand company.
The Acer-Gateway deal still faces regulatory and shareholder scrutiny before being finalized. The boards of directors of both companies have already signed off on the agreement.
Acer expects to gain US$150 million worth of efficiencies via the Gateway deal, through expanding product lines, cross-selling products, cost cutting and in other ways. The company said Gateway employees would be critical to its success in expanding the brand, but it did not say whether it would cut staff.
