Dell adds Alienware to PC empire

Dell has agreed to purchase gaming PC maker Alienware, in a rare acquisition designed to improve Alienware's supply chain and boost Dell's standing among PC enthusiasts.

Financial terms of the deal were not disclosed. Alienware will operate as a wholly owned subsidiary of the world's largest PC maker, said Nelson Gonzalez, chief executive officer of Alienware. Gonzalez will now report to Jim Schneider, Dell's chief financial officer, but the company will operate separately from Dell, he said.

A Dell representative confirmed the deal, but said the company was deferring comment until later on Wednesday. A Dell representative in Australia had downplayed the possibility of a deal last week. The transaction should be finalised about 30 to 45 days after regulatory hurdles are cleared, Gonzalez said.

Alienware had considered raising capital through an initial public offering, but came to realise that being acquired by Dell would allow it to raise more money and to take advantage of Dell's supply chain and procurement expertise, Gonzalez said.

"We know our strengths and know our weaknesses, and one of our weaknesses has been supply chain," Gonzalez said. Both companies use direct sales models to reach customers, but Dell is well-known for its efficient manufacturing process.

In fact, it's so well-known for that strength that after rumours of the deal first surfaced some analysts said a company like Alienware would not be a good fit with Dell. Alienware specialises in exotic designs and colourful systems that take longer to build than the standard building blocks used by many of Dell's PCs.

But Dell's efficiency will not hurt Alienware's product development process, Gonzalez said. "We're not going to sacrifice the design of a product for the sake of the efficiency," he said.

Alienware will also continue to offer PCs that use processors from both AMD and Intel, he said. Dell has an exclusive relationship with Intel, but that will not affect Alienware's relationship with both chipmakers.

"I can't speak for Dell's plans, but from our vantage point, nothing has changed there," Gonzalez said.