Bloomberg is reporting that "Acer Inc. shares fell by the daily limit on concern the Taiwanese personal computer supplier is overpaying for a $710 million acquisition of Gateway Inc. to become the world’s third-biggest PC maker."
While some might argue the bid is overpriced, the strategic move is brilliant because "Adding Gateway will double Acer’s market share in the U.S. and allow it to exercise the right to buy Europe’s Packard Bell NV, which Lenovo was in talks to acquire."
Erica Ogg from CNET News.com is correct in stating: "A string of bad quarters, a revolving door into the chief executive’s office and a schizophrenic business strategy have all led to Gateway’s end as an independent company after 22 years in business." This rough past brought Acer to this point of decision – grow or die.
Once more, "To people who’ve watched Gateway’s aimless adventures of the last few years, the new and focused management that will be at the helm is probably a good thing, and a long time coming."
Of course, Acer’s Gateway bid places the company in direct sales.