EU Approves Acer's Acquisition of Packard Bell

Through its Gateway division, Acer will acquire one of the largest PC vendors in Europe.

The European Commission approved Acer's acquisition of Packard Bell, which now opens a new and substantial market for the up-and-coming Taiwanese company.

In a statement released Feb. 27, the European Commission-the antitrust enforcement arm of the European Union-announced it would not block the acquisition.

When Acer bought Gateway in 2007, the company gained the right to make a first bid for Packard Bell, which had previously entered negotiations to be acquired by Gateway. According to a filing with the U.S. Securities and Exchange Commission, Gateway offered to buy Packard Bell, which is based in the Netherlands, for $44 million.

The announcement also means that Lenovo, which has also been looking to expand in Western Europe, will not get a chance to make its own bid.

In its statement, the European Commission announced that the merger of Acer and Packard Bell would not stifle competition within the continent's markets.

According to a statement on the commission's Web site: "The Commission's examination showed that the proposed merger would entail horizontal overlaps for desktops and laptops, both for professionals and consumers, at the [European Economic Area] and national levels.

"However, the market would remain competitive post-merger in all segments of the PC sector with established alternative suppliers such as Hewlett-Packard, Dell, Fujitsu-Siemens, Toshiba, Sony and Lenovo."

The merger of Acer and Gateway is expected to eventually create the world's third-largest PC vendor behind Hewlett-Packard and Dell, with annual revenues of $15 billion and PC shipments expected to top 20 million units.

In the U.S. market, Gartner found that Acer shipped 1.5 million PCs in the fourth quarter of 2007, an increase of 11 percent year-over-year.

While the move to buy Gateway is expected to increase Acer's presence in the United States, especially in retail, the move to buy Packard Bell should increase the company's presence in Western Europe.