Oct. 8 (Bloomberg) -- Gateway Inc., the third-largest U.S. maker of personal computers, agreed to buy the company that owns most of Europe's Packard Bell BV. Terms weren't disclosed.

Acer Inc., which is acquiring Gateway, said in August it would fund Gateway's acquisition of PB Holding Co., the parent company of Packard Bell. Gateway delivered a bid Oct. 4 to Lap Shun ``John'' Hui, who controls a 75 percent stake in PB Holding, and Hui's Clifford Holdings Ltd., according to a statement today.

Gateway said in August that it has right of first refusal on buying Paris-based Packard Bell because of a June 2006 agreement, when shareholder Hui submitted a proposal to buy Gateway. Hui had sold his privately held EMachines Inc. to Gateway in March 2004.

The Packard Bell takeover should be completed by the first quarter of 2008, pending regulatory approval, Irvine, California- based Gateway said in the statement.

Gateway shares rose 1 cent to $1.89 at 4 p.m. in New York Stock Exchange trading. The stock has fallen 6 percent this year.

Acer is buying Gateway for $710 million, a deal that would make the Taipei-based company the third-largest PC maker in the world. Acer would trail Hewlett-Packard Co. and Dell Inc. The company expects the acquisition to close this year.

To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net.

Last Updated: October 8, 2007 17:53 EDT