Gateway brand to expand after Acer purchase

Acer to begin using multiple brands around the world

People fearing they might miss Gateway's signature black-and-white dairy cow PC boxes after the company is acquired by Acer have little reason to worry: Acer not only plans to keep the Gateway brand just the way it is, the Taiwanese company hopes to expand it.

[ See also:  Acer to aquire Gateway for $710 million |  Lenovo's plan for Packard Bell hit by Acer-Gateway deal ]

"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 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, as well as eMachines and possibly Packard Bell. Gateway plans to buy Packard Bell, which would ultimately end up as another Acer brand once the Acer-Gateway deal is finalized.

Going forward, 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 expand this product cooperation to Packard Bell if a deal for the company is made.

The deal 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 and Dell should remain fierce, and the companies all work hard to keep prices low.

Acer agreed to buy Gateway in an all-cash deal valued at $710 million. The two companies combined will become the world's third largest PC vendor by shipments, at around 20 million desktops and laptops a year, and will transform Acer into a multibrand 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 $150 million worth of efficiencies via the Gateway deal, in expanding product lines, cross-selling products, cost cutting, and in other ways. The Taiwanese company said Gateway employees would be critical to its success in expanding the brand, but did not say whether it would cut staff.

Copyright © 2007 IDG Communications, Inc.

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