Acer planning to buy Acer Sertek in consolidation drive

Acer Inc (宏電) said it will buy Acer Sertek Inc, (宏科) its distribution and services unit, as part of a reorganization process it started last year.

Acer offered two-and-a-half of its own shares for each share in Acer Sertek, valuing the takeover at NT$13.5 billion (US$390 million).

The cost was based on Acer's closing share price of NT$18.6 today and Acer Sertek's NT$1.55 billion long-term debt.

Acer, which already owns about a third of the unit, will absorb Acer Sertek's 256.6 million outstanding shares.

"The consolidation is aimed at reducing redundancy in the group," said Acer spokesman Henry Wang (汪島雄).

Acer posted losses selling PCs in the first two quarters and expects to remain unprofitable in the third quarter as customers such as IBM Corp place fewer orders.

The takeover is part of Acer's bid to tap the growing demand for PCs in China. Acer Sertek plans to expand its distribution channel in China to 1,000 stores this year.

"Acer Sertek controls the distribution channels in China, so the consolidation will give Acer better and direct access to the fastest-growing mainland market," said Lin Hung-chung, who manages HSBC Asset Management Ltd's NT$5 billion Electronics Fund.

Lin invested in Acer Sertek, though he said he does not intend buying Acer shares.

Acer, once among the seven largest PC makers, stopped selling computers in the US under its brand name late last year to focus on manufacturing for other companies. Acer shares rose NT$0.70, or 3.9 percent, to NT$18.60.

The stock has risen 40 percent in the past 12 months, compared with a 4 percent drop in the key TWSE Index. Acer Sertek shares gained 17 percent during the same period. Foreign institutional investors today sold 9.3 million shares in Acer, more than any other Taiwanese stock, before the announcement.