Gateway Plans to Buy Packard Bell

Gateway Inc. on Monday announced plans to acquire PC vendor Packard Bell BV for an undisclosed amount, a move funded by Acer Inc. as part of its planned acquisition of Gateway.

Gateway delivered a binding offer to purchase all of John Hui's shares in PB Holdings Co. SARL, Packard Bell's parent company. Hui is Packard Bell's largest shareholder.

Acer announced its plans to buy Gateway in late August for US$710 million.

In 2006, Gateway signed an agreement with Hui that gave Gateway the right of first refusal if he decided to sell PB Holding Co. At the time, if Paris-based Packard Bell wanted to enter into a final agreement to be purchased by a third party, the company had to ask Gateway first. Gateway could then move into the first position to enter purchase talks with Packard Bell.

Hui also sold the privately held eMachines to Gateway in 2004.

The acquisition will be a blow to Lenovo Group Ltd., which in early August revealed it was in discussions with Packard Bell over a possible acquisition.

The deal is anticipated to close later this year or in the first quarter of 2008, Gateway said.