Acers proposed $710 million acquisition of Gateway will face at least pro forma antitrust scrutiny from government regulators, although Washington has shown little inclination in recent years to oppose mergers and acquisitions.
Noting the competitive landscape of the personal computer market, Lars Liebeler, an antitrust attorney for the Washington-based IT trade group CompTIA, said he saw little reason for either the Federal Trade Commission or the Department of Justice to oppose the deal for the Taiwan-based Acer to take over Gateway.
"The primary purpose [of an antitrust review] is a response to market efficiency," Liebeler said. The personal computer market, he added, was "fairly intensive and, in the end, its likely [the acquisition] will be good for consumers… Its a natural process you go through in any market."
Mitch Katz, a spokesperson for the FTC, said the agency has 30 days to decide if the deal warrants antitrust review from either the FTC or the DOJ. The FTC also has 30 days to decide if it wants further information on the acquisition before making a decision.
Since the deal also involves a foreign company acquiring a U.S. firm, the acquisition must also face muster from the Committee on Foreign Investment in the U.S., an inter-agency group chaired by the Department of Treasury and includes the U.S. Trade Representative, Commerce, State, Defense, Justice and Homeland Security Departments.
A CFIUS review determines whether a particular acquisition by a foreign company has national security issues. The CFIUS can block such arrangements if there is credible evidence that the foreign entity exercising control might take action that threatens national security.
Acers $710 million acquisition of Gateway gives Dell a cow. Click to read more.
In 2005, CFIUS approved the China-based Lenovos $1.75 billion acquisition of IBMs personal computer business. Last year, the CFIUS gave a thumbs up to the $13.4 billion merger of Frances Alcatel with U.S.-based Lucent Technologies.
When the CFIUS receives notice of a proposed acquisition, it has 30 days to decide whether to undertake an investigation. If an investigation is undertaken, the CFIUS must make its formal report to the president within 45 days. The president then has 15 days to render a decision.
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