In an attempt to form the third-largest computer manufacturer in the world, Taiwan-based Acer, announced on Monday that it is to buy US manufacturer Gateway. The company also ships laptops and desktops to big-name stores in the UK. Acer said it would purchase all outstanding Gateway shares for an estimated $710 million (£354 million).

The acquisition is expected to close by December and will create a multi-branded computer manufacturer with over $15 billion (£7.5 billion) in revenue and shipments of over 20 million PCs each year.

Approval still needed

According to those close to the agreement, Acer will commence a cash offer to purchase all of Gateway's outstanding shares at a reported $1.90 (£0.95) per share. Both Gateway and Acer boards have unanimously approved the acquisition, but it is subject to standard closing conditions, including legal approval.

"This strategic transaction is an important milestone in Acer's long history," said J.T. Wang, chairman of Acer. "The acquisition of Gateway and its strong brand immediately completes Acer's global footprint, by strengthening our US presence.

"This will be an excellent addition to Acer's already strong positions in Europe and Asia. Upon acquiring Gateway, we will further solidify our position as [the] number three PC vendor globally."

According to both companies, the completed deal will result in significant cost and revenue benefits, and per unit procurement of components should drop significantly. Early estimates expect the company's US market share to rise to 10 per cent.

In a separate announcement on Monday, Gateway announced that it's currently in negotiations with a third-party to sell its US Professional business.