The Taiwanese firm Acer is to become the world's third biggest computer company by paying $710m (£352m) for California-based Gateway, creating a combined force selling 20m machines annually.
The deal, announced yesterday, will push Acer ahead of China's Lenovo to put it behind only Hewlett-Packard and Dell among hardware manufacturers. Acer makes computers under a variety of brands. Its purchase of Gateway gives it the right to take control of Packard Bell in France.
Source: business.guardian.co.uk
Acer is ``wasting its cash bullets'' in an ``overly priced'' takeover of Gateway, Daniel Chang, an analyst at Macquarie Securities wrote in a report today. ``Acer focuses too much on market share and ignores its profitability.''
Chang cut Acer's rating from ``outperform,'' and lowered the company's 12-month share-price estimate to NT$63.50 from NT$80.70.
Acer's second-quarter net income slipped to NT$1.98 billion ($60 million). Acer was expected to post profit of NT$1.95 billion, according to the mean estimate of eight analysts compiled by Bloomberg.
Source: bloomberg.com
Analysts are divided over what this hurdle could mean for corporate-focused Lenovo's strategy to tackle the U.S. and European consumer PC market.
Some view the loss of Packard Bell as a longer-term blow to Lenovo's global ambitions, which the PC maker has said hinges on being able to grab market share in a consumer market it has little knowledge of.
"Its share price is likely to take a hit in the near term," JP Morgan analyst Charles Guo said on Tuesday.
Source: investing.reuters.co.uk
Tags: Acer | biggest | Brands | buys | California | China | Dell | firm | France | Gateway | hardware manufacturers | Hewlett-Packard | Iowa | Lenovo | Packard Bell | Taiwan | Technology
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