Gateway, Acer, Packard Bell To Merge, Form Voltron

Acer is buying Gateway for $710 million. Meanwhile, Gateway has just offered to buy Packard Bell for $100 million, according to MSNBC.

Together, they will form Voltron and fight Chinese rival, Lenovo.

Acer has agreed to finance the Packard Bell bid and said it had already put the necessary funds into escrow for Gateway to use.

A source close to Acer said the cost for the Packard Bell acquisition would come on top of the US$710m Acer is to pay for Gateway, but the European PC maker would cost it less than US$100m. The source said that the agreement between Gateway and John Hui, Packard Bell’s major shareholder, did not allow for a renewed rival bid following from Lenovo following an offer from Gateway, thus preventing a bidding war between Lenovo and Acer.

Lenovo had expressed an interest in acquiring Packard Bell to bolster its European presence.

But Gateway last month threw those plans into doubt, saying it intended to exercise its right of first refusal to acquire all shares in Packard Bell’s holding company from Mr Hui. Gateway acquired the option to buy Mr Hui’s shares last year.

Nevertheless, Bill Amelio, Lenovo’s chief executive, said last month that Lenovo was “still very interested” in the company. Acer and Lenovo have been fighting for third place in the global PC industry behind US computer makers Hewlett-Packard and Dell.