Dell-Acer is "attractive" merger idea: analyst

A Dell Latitude D430 laptop computer is seen in New York August 26, 2008.

NEW YORK (Reuters) - The personal computer industry may be ripe for a wave of consolidation, with a marriage of Dell Inc (DELL.O) and Acer Inc (2353.TW) seen as a particularly smart deal, according to an influential Wall Street analyst.

"Among the 10 top PC vendors, we believe that a Dell/Acer combination makes the most sense," Sanford C. Bernstein & Co analyst Toni Sacconaghi said in a client note on Friday.

If Dell were to buy Acer for a 20 percent premium, or about $5.7 billion, it would boost Dell's annual revenue growth sharply and add 12 cents a share to annual profit, he said.

The PC industry is commoditized and remains fragmented. Consolidating could help companies score better pricing from component vendors and contract manufacturers, as well as cost savings in areas such as human resources, he said.

"We view PC vendors as analogous to retailers, where our research suggests that the largest and operationally most efficient have garnered outsized profits relative to their peers," Sacconaghi wrote in his report.

Acer has a strong share of the portable computer market outside the United States, which would provide Dell with exposure to faster growth markets, he added.

Sacconaghi said buying Acer might also be beneficial to top PC maker Hewlett-Packard Co (HPQ.N), but not as much as it would to Dell.

"While an HP-Acer combination might provide similar scale and synergy benefits, end market complementarity would not be as high," he said.

According to research firm Gartner, Dell and Acer were in a virtual tie for second place in the first quarter in market share in the United States.

(Reporting by Franklin Paul; Editing Bernard Orr)