Acer to buy small PC vendor -- but not Gateway, it says

Acer expects to acquire a small company in the coming months to expand its PC business but has ruled out Gateway as a possibility.

Reports last month that Acer was interested in buying a rival sparked rumors that the target might be Gateway, sending its shares to a 52-week high of $2.44 on March 19, an 18 percent leap from the start of the month.

Acer declined to say who the target is but its chairman, J.T. Wang, said at an investor conference in Taipei Friday that it is "not in the United States," ruling out Gateway.

Talks are underway with the target company and Acer expects to conclude a deal in three to five months, Wang said. "It's a small case so we will not spend so much money," he added.

Wang revealed in March that Acer was looking for acquisition targets as part of its bid to overtake Lenovo Group as the world's third-biggest PC vendor. But Acer won that crown from Lenovo in the first quarter in any case, according to Gartner. Acer ended the quarter with 6.8 percent of the market, compared to Lenovo's 6.3 percent, the market researcher said.