GameStop and Electronics Boutique announce merger

[-NakedZ-]

Giant merger will secure around 22 per cent of the US market; next stop Europe?

April 18, 2005 - America's largest videogame retail chains, GameStop and Electronics Boutique, have announced their intention to merge in a $1.44 billion deal which will create the world's largest games retailer, with around $4 billion in annual turnover.

Under the terms of the deal, GameStop will acquire all the outstanding shares in Electronics Boutique for $55.18 - a 34 per cent premium over the closing price of its rival on Friday evening.

The merged company, with GameStop as the surviving entity, will have 3,800 stores worldwide, of which 3,200 will be in the United States - representing the largest game retail chain in the world.

However, according to analyst Gary Cooper at Banc of America Securities, the deal should not trouble regulators in America, since the combined company will still only have some 21 to 22 per cent of the overall market.

"[GameStop and Electronics Boutique] will basically dominate the retail market for the hardcore gamer," he noted this afternoon. "However, [the two retailers] combined control only 21 to 22 per cent of the total US video game market, which is about the same as Wal-Mart, the current market share leader."

The industry in Europe will, of course, be watching the moves of the newly-created giant with regard to this market with great interest. Both firms have recently restated their intentions to expand in Europe, with Electronics Boutique targeting the continent with a major store-opening programme, while GameStop intends to open 35 stores in the UK this year.

Only a few weeks ago, leading UK retailer GAME - which is also the largest specialist videogames retail chain in Europe as a whole - informed the London Stock Exchange that it was in preliminary discussions regarding a possible sale of the company, but it has not been revealed who the potential suitor is.

Source

I wonder if they'll merge their retailers into one under the same retail logo. And what would they name it? And I really don't think it would have a major effect on the industry.

 

[digitalwanderer]

They weren't one already? :?

I really thought they were both part of the same chain under different names already, their brick & mortar stores look almost identical.

(And I've spent WAAAAY too much time in them lately, it's one of my kids favorite places to go...go figure. )

 

[see colon]

the new mega corporation will be branded "gamestop", most (if not all) retail stores will have been re-branded within the next 2 months.

this is awsome news for companies like EA. they now only have one corporation to bribe.

 

[London Geezer]

edited by moderator:



london-boy, this is your last chance. Stop flaming the boards with insults bashing other companies left and right. It was funny at first but it's getting out of hand. Please post in a way that it adds discussion to a thread, not just derailing it.