Acer to Buy Gateway for $710M

Stock jumps 50% following announcement
By Kevin Spak,  Newser Staff
Posted Aug 27, 2007 1:38 PM CDT
A Gateway computer is on display for retail sale at a Best Buy store in Los Angeles on Aug. 23, 2006. Based Irvine, Calif., Gateway, Inc. has recently implemented layoffs and cuts as it struggles with...   (Associated Press)
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(Newser) – Gateway’s stock jumped 50% today on news that Taiwan’s Acer will buy the former PC giant for $1.90 a share, MarketWatch reports. The acquisition leapfrogs Acer over Lenovo to the No. 3 spot in world computer sales. Meanwhile, Gateway said it will execute its right of first refusal to buy Packard Bell's parent company, foiling Lenovo's bid to acquire PB.

Though still a top seller in the US, Gateway has slid dramatically from its pre-tech-crash heyday, when it was worth an estimated $27 billion. Its second quarter US sales declined 7% from last year, compared to a 164% rise for Acer. Acer’s CEO says the deal completes the company's global footprint by increasing its US market share.