SAN DIEGO, Dec. 7 /PRNewswire/ -- Gateway, Inc. (NYSE: GTW) today
announced an agreement with America Online, Inc., that amends the investment
agreement entered into by the companies in December 1999 and expands the
companies' distribution and marketing alliance.
Under the terms of the new agreement America Online will invest
$200 million in Gateway Series A convertible preferred stock and will exchange
the $200 million of Gateway convertible debt it currently holds for shares of
a new class of Gateway Series C convertible preferred stock. Under the
original agreement America Online was to invest $400 million in Gateway Series
A convertible preferred stock. The closing of the final investment is
scheduled for later this month and is subject to customary conditions.
Shareholder approval is not required for the transaction.
Building upon the successful relationship over the past two years, Gateway
will continue to distribute and promote AOL's products and services, including
Netscape browser and AOL(R) Instant Messenger(TM), across the Gateway product
line. In addition, Gateway will promote its products and services across AOL
Time Warner offline media. As part of this expanded agreement, America Online
and Gateway will also work together to promote AOL's broadband products.
"We're pleased with these arrangements as we believe they benefit Gateway and
its shareholders," said Joseph Burke, Gateway's chief financial officer.
"They will enhance Gateway's strong liquidity position and eliminate our
long-term debt while being sensitive to shareholder dilution. We look forward
to a continued strong partnership with America Online as we develop compelling
solutions for our customers."
About Gateway
Gateway (NYSE: GTW), a personal technology company, improves people's
lives through a combination of the latest and best hardware, communication
tools, applications, training and service, all wrapped in a custom financing
package. The company takes a localized approach, utilizing its Web site, call
centers and nationwide network of Gateway retail stores to build direct
relationships with consumers, small and medium businesses and government and
education institutions. A Fortune 500(R) company founded in 1985, Gateway is
ranked as the most admired American company in the Computers and Office
Equipment industry in a Fortune magazine survey(1) and is the top brand in
customer loyalty and for first-time home computer purchases of Wintel-based
PCs(2). For more information, visit Gateway's Web site at http://www.gateway.com .
(1) Fortune Magazine, "America's Most Admired Companies,"
February 19, 2001.
(2) From the Harris Interactive Consumer TechPoll(SM) study of
140,000 PC owners who use the Internet, released March 5, 2001.
SOURCE Gateway, Inc.
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Related links:
http://www.gateway.com
CONTACT:
media, Donna Kather, +1-858-848-2657,
donna.kather@gateway.com, or investors, Marlys Johnson,
+1-605-232-2709, marlys.johnson@gateway.com, both of Gateway,
Inc.
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