Acer to acquire smart-phone maker E-Ten

Acer Inc., the world's third-largest PC vendor, has signed an agreement to buy handheld device maker E-Ten Information Systems Co.

The acquisition will put Acer in a position to market and further develop a range of handheld devices, including smart phones and Global Positioning System devices. E-Ten has developed and sold several smart-phone models over the past several years, including its Windows Mobile 6.0-based Glofish smart phone with GPS capability, in addition to other handheld electronic devices such as GPS devices and pocket PCs.

The deal is an all-stock transaction valued at $9 billion New Taiwan ($291.3 million U.S.). Acer is offering to exchange one share of its stock for every 1.07 shares of outstanding E-Ten stock to pay for the deal. Both companies are based in Taiwan.

The boards of directors at both companies have already approved the deal, but they still face shareholder votes and approval by government regulators.

The companies expect the deal to close in the third quarter of this year.

Acer cited mobility products as the main reason for the purchase, especially smart phones.

"The acquisition of E-Ten will allow Acer to play a key role in the development of the dynamic, fast-evolving market of smart handheld devices as well as ultramobile devices in the future and will help bring Acers cutting-edge mobile solutions to an even wider audience," Acer said in a statement.

The E-Ten deal follows a string of acquisitions by Acer, including the purchase last year of PC maker Gateway Inc. and the recent deal to buy Packard Bell NV, a Netherlands-based electronics maker.

Copyright © 2008 IDG Communications, Inc.

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