Gateway set to acquire Packard Bell

Gateway has announced it has agreed to take over the controlling stake in Paris-based PC vendor Packard Bell.

Gateway has exercised its right of first refusal to purchase all of the shares of PB Holding Company, the parent company of Packard Bell, from Lap Shun (John) Hui and Clifford Holdings, also controlled by Hui. Both companies control 75 per cent of Packard Bell stock. Financial details of the transaction have not yet been disclosed.

The announcement wasn't a surprise - Gateway and Lenovo have waged a public battle over Packard Bell - with Gateway announcing its intentions in August.

Lenovo did not respond to a request for comment.

Gateway announced its own acquisition in August by Acer, which has agreed to fund the purchase of Packard Bell.

The Gateway-Packard Bell union has a somewhat convoluted, overlapping back story. Hui, who is selling his shares of Packard Bell, is a former executive of eMachines, the tiny computer maker that Gateway purchased in 2004 for $262m in a bid to increase its market share. Two and a half years after that sale, in an unsolicited bid, Hui offered to buy out Gateway's retail PC business - mainly the eMachines brand - an offer that was flatly rejected.

Gateway's acquisition of Packard Bell on behalf of Acer is partly a defensive move for Acer, which is intent on taking over Lenovo's position as number three PC maker in the world.

Samir Bhavnani, an analyst with Current Analysis West, said: "From Acer's perspective, they know Lenovo's strong in Asia, and they know Lenovo wants to grow in the US and Europe. This throws up a little bit of a block and gives Acer an advantage in Europe."

Erica Ogg writes for CNET News.com