Menu
Acer head vows to step down if Gateway deal fails

Acer head vows to step down if Gateway deal fails

Amid mounting criticism of the deal, the chairman and CEO of Acer Inc. has vowed to step down if the company's bid to join with Gateway Inc. does not succeed.

"The merger will definitely succeed. If it doesn't ... I will resign," the Chinese-language newspaper, Economic Daily News, quoted Acer Chairman and CEO J.T. Wang as saying in an interview published Wednesday. Acer spokesman Henry Wang confirmed the statement.

The statement came amid growing criticism of the acquisition, which the companies' boards have approved. Industry watchers and stock market analysts have called the US$710 million purchase too expensive, saying Acer should have foregone the deal and continued to grow its U.S. business from the ground up. The company's U.S. sales have grown at over 100 percent for the past few years, according to Acer.

Other analysts fear Acer may have trouble bringing Gateway into its fold because it may ultimately become a three-in-one deal, including Gateway subsidiary eMachines and Europe's Packard Bell BV. That may be too many companies to absorb in one go, analysts say.

"The premium paid to Gateway may be too high, and the execution risk of multiple-brand strategy is clearly the key here," said Vincent Chen, PC industry analyst at CLSA Asia-Pacific Markets in Taipei.

Taiwanese investors don't like the deal, either.. Acer's shares have fallen by their daily market limit, 6.9 percent, for each of the past two days to close at NT$55.1 (US$1.67) Wednesday on the Taiwan Stock Exchange.

Acer agreed on Monday to buy Gateway in an all-cash deal for US$1.90 per share, a 57 percent premium on its closing share price of US$1.21 on the New York Stock Exchange on Friday.

Acer said the deal will transform it into a much larger company with US$15 billion per year in revenue and shipments of nearly 20 million PCs, giving it a solid base in the important U.S. market. The company plans to market multiple PC brands worldwide after the transaction, thereby increasing sales. The deal will also help it cut costs. Size is vital to gaining volume discounts from parts suppliers, Acer said.

The purchase still faces regulatory and shareholder approval.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Featured

Slideshows

Meet the leading customer-centric Microsoft channel partners

Meet the leading customer-centric Microsoft channel partners

Microsoft honoured leading partners across the channel following a year of customer innovation and market growth in New Zealand. The 2018 Microsoft Partner Awards recognised excellence within the context of the end-user, spanning a host of emerging and established providers.

Meet the leading customer-centric Microsoft channel partners
Reseller News launches new-look Awards at 2018 Judges’ Lunch

Reseller News launches new-look Awards at 2018 Judges’ Lunch

Introducing the Reseller News Innovation Awards, launched to the channel at the 2018 Judges’ Lunch in Auckland. With more than 70 judges now part of the voting panel, the new-look awards will reflect the changing dynamics of the channel, recognising excellence across customer value and innovation - spanning start-ups, partners, distributors and vendors.

Reseller News launches new-look Awards at 2018 Judges’ Lunch
Show Comments