Acer + Gateway = BFF

One is a once high-flying, bovine-oriented U.S. computer company that hit the skids in 2000. The other is an international powerhouse with limited exposure in the U.S. outside of budget-oriented computers. Together they're, well, no one's quite sure yet of what they are, but one thing is certain: The newly-announced Acer-Gateway merger will create the world's third-largest PC company, shipping $15 billion worth of computers every year.

The price of Acer's acquisition of Gateway is $710 million, not much in the world of multi-billion-dollar mergers but not shabby for recent consumer electronics deals. Gateway itself spent $234 million on ultra-low-end PC company eMachines in 2004. Considering Gateway hasn't shown a profit in at least the last six years and sales are down 33 percent since 2001, investors are probably getting away with a good deal here.

Despite Gateway's financial woes, observers expect this to be good for Acer, which will likely use the Gateway brand to push much more extensively into the U.S. market, where Acer has weak brand recognition. Still, the Acer brand is likely to survive on U.S. shores, possibly with Gateway and Acer differentiating to focus on different market segments, much as HP has done with the Compaq brand.

Bottom line for customers: Don't expect radical changes to either brand for the time being, whether you're looking for support for an older PC or purchasing a new one.

LINK: Acer to Acquire Gateway, Forms World's 3rd Largest PC Company