Acer is to acquire Gateway in a deal worth $710 million. Acer says that the purchase will make it the world's third-largest PC vendor.
Under terms of the agreement announced Monday, Acer will purchase all of Gateway's outstanding shares for $1.90 per share. The deal has already been approved by the boards of directors at both companies and should be completed by the end of this year, subject to government approval, Acer said in a statement.
Acer has been locked in a tight battle with rival Lenovo for the number-three spot in the global PC market, behind HP and Dell. Lenovo slipped behind in the second quarter as the Chinese holiday season affected its sales more than Acer's, but a surge in shipments pushed Lenovo back into third place during the second quarter, according to figures from IDC.
However, Acer is growing at a faster rate and looks set to overtake Lenovo before the end of this year, if current trends continue.