April 18, 2005 - Game retailer GameStop is in agreement to acquire formal rival Electronics Boutique (better known as EB Games), according to an announcement by both companies today. The companies estimate the value of the transaction, including cash and stock, to be about $1.44 billion.
The combined company, which will keep the GameStop name, will operate more than 3,200 stores nationwide, as well as almost 600 stores internationally. The new company expects annual revenues of about $3.8 billion, and will almost certainly become the leading game retailer in the country.
Both companies saw share increases following this morning's announcement. At the time of this writing, Electronics Boutique stock rose 14.63 points to $55.75 (about 35%), while GameStop rose 3.04 points to $24.65 (about 14%).
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."
Fontaine, along with Daniel A. DeMatteo, GameStop's Vice Chairman and Chief Operating Officer, will each retain their positions in the new company.
While the boards of both companies have unanimously approved the merger, the deal still faces approval by shareholders as well as legal authorization.
Taken from:
IGN.com
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