GameStop Corp. and Electronics Boutique Holdings Corp. have announced that they have entered into what the two companies describe as "a definitive agreement and plan of merger", but what can effectively be seen as a GameStop acquisition of EB, thereby creating the biggest specialty video game retailer in North America.
The price of the acquisition for GameStop is approximately $1.44 billion, consisting of around 70% cash and 30% common stock. The combined company will be named GameStop Corp. and will have annual revenues of approximately $3.8 billion, with over 3,200 stores located in all 50 U.S. states.
The merged institution will also include nearly 600 international stores located in Australia, Canada, Denmark, Germany, Ireland, Italy, New Zealand, Norway and Sweden, and will continue to run major online game stores such as GameStop.com and EBGames.com, as well as the Game Informer print magazine.
Following completion of the merger, R. Richard Fontaine, GameStop's Chairman and Chief Executive Officer, and Daniel A. DeMatteo, GameStop's Vice Chairman and Chief Operating Officer, will each serve in the same capacity for the combined company, which is estimated by analysts to have a market share of around 25 percent for the North American retail market.
R. Richard Fontaine, GameStop's Chairman and Chief Executive Officer, said: "This is an exciting transaction for everyone involved - our customers, our shareholders, and our two companies. This merger, which is a very positive step for GameStop, will enable us to enter new international markets and allow us to compete more effectively in the highly competitive U.S. video game industry."