Wed, Sep 05, 2007 - Page 11 News List

Acer mulls acquiring Chinese firm

By Kevin Chen  /  STAFF REPORTER

Acer Inc is considering another industry acquisition in the second half of next year to boost its market share in China, chairman Wang Jeng-tang (王振堂) said in an interview with the Financial Times.

Wang's interview with the British newspaper came just a week after the Taipei-based computer maker announced a US$710 million cash tender offer for Gateway Inc of the US.

"I'm no longer insisting to rely on organic growth .... after nine months or a year, we are not ruling out reinforce our market share and presence in this place [China] through a suitable acquisition," Wang said in the interview, which was published yesterday.

Wang didn't specify what company Acer is interested, but his remarks underlined the growing competition between Acer and Lenovo Group Ltd (聯想).

"We have observed that Lenovo has already stabilized over the past six months ... They are on a upside curve," Wang said.

Acer's shares dropped NT$1.10, or 1.95 percent, to close at NT$55.40 on the Taiwan Stock Exchange yesterday.

The stock has declined 12.9 percent since the Gateway acquisition announcement on Aug. 27 because investors are concerned Acer will be paying too much for the deal.

Wang said the acquisition of Gateway would create a revenue of US$6 billion to US$7 billion for Acer's US business, with a 2 percent to 3 percent net profit margin. He said he expected this to happen within two years.

Acer is now working with its consultants on how to develop a strategy of multiple brands that will include Acer, Gateway, Packard Bell and eMachine.

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