Menu
Acer's strike derails Lenovo's plan for Packard Bell

Acer's strike derails Lenovo's plan for Packard Bell

Acer's agreement to acquire Gateway has foiled Lenovo Group.'s plans to buy PC vendor Packard Bell BV, and could leave Acer owning both Gateway and Packard Bell.

On August 7, Lenovo revealed it was in discussions with Packard Bell over a possible acquisition. At the time, it looked like Lenovo had beaten Acer, which was also interested in acquiring the company.

However, Acer's plan to buy Gateway for US$710 million, announced on Monday, trumps anything Lenovo brings to the table in its negotiations with Packard Bell.

In 2006, Gateway signed an agreement with John Hui, Packard Bell's largest shareholder, that gives Gateway the right of first refusal if he decides to sells PB Holding Co. SARL, the parent company of Packard Bell.

What that means is that if Packard Bell wants to enter into a final agreement to be purchased, the company has to ask Gateway first, said Y.T. Du, of Citigroup Global Markets, which represented Acer in the negotiations. Gateway can refuse the deal if it wants and enter into purchase talks with Packard Bell, he said.

That is exactly what Gateway has done, announcing plans to exercise its right of first refusal at the same time the Acer deal was unveiled.

The agreement between Hui and Gateway is rooted in Gateway's 2004 acquisition of eMachines., a PC vendor that Hui founded. When Hui acquired his stake in PB Holding, he granted the right of first refusal to Gateway in exchange for the company waving parts of the noncompete agreement that Hui signed when eMachines was sold.

Now that Gateway has entered into talks to acquire PB Holding from Hui, Acer could end up owning both Gateway and Packard Bell. While a Packard Bell acquisition would increase Acer's market share in Europe, a deal also means Acer will face having to integrate two companies with its existing operations instead of only one.

"Acer is still really strong in Europe," said Bryan Ma, director of personal systems research at IDC Asia-Pacific. Ma worried that Acer's desire to acquire Packard Bell is driven more by a desire to slow Lenovo's growth in Europe, rather than a pressing need to strengthen its own position there.

A Lenovo spokeswoman was not immediately available to comment.


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.

Tags acerLenovoGatewaypackard bell

Events

Why experience is the new battleground for partners

Join us for an exclusive webinar, in association with Hewlett Packard Enterprise and Technology Services Industry Association (TSIA) and learn about the latest industry insights and how technology services continue to evolve to deliver differentiated value, and how partners can be successful in 2021 and beyond.

Featured

Slideshows

Channel kicks 2021 into gear as After Hours returns to Auckland

Channel kicks 2021 into gear as After Hours returns to Auckland

After Hours made a welcome return to the channel social calendar with a bumper crowd of partners, distributors and vendors descending on The Pantry at Park Hyatt in Auckland to kick-start 2021.

Channel kicks 2021 into gear as After Hours returns to Auckland
The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

Hundreds of leaders from the New Zealand IT industry gathered at the Hilton in Auckland on 17 November to celebrate the finest female talent in the Kiwi channel and recognise the winners of the Reseller News Women in ICT Awards (WIICTA) 2020.

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards
Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

The leading female front runners of the New Zealand ICT industry joined together for the annual Reseller News Women in ICT Awards event at the Hilton in Auckland, during which hundreds of guests celebrated 13 outstanding individuals who won awards, chosen from more than 50 finalists representing over 30 organisations.

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards
Show Comments