Shareholders OK GameStop, EB Games merger

Two largest specialty game retailers to form megaretailer over weekend; GameStop locks up used-game market.


GameStop Corp. (GME) and Electronics Boutique Holdings Corp. (ELBO), owner of EB Games, announced that their shareholders have green-lighted the merger of the two companies. The approval was the last step in the deal, which was made public in April.

The companies will officially merge over the weekend, and will retain the name GameStop Corp. The deal is estimated to be worth $1.44 billion, and will result in approximately 4,000 retail stores across the globe.

The fusion of the two companies creates the largest retailer focused on gaming, and gives larger retailers, such as Wal-Mart and Best Buy, some heavy competition in the sector. The new company will handle approximately one quarter of the gaming market.

The new company will dominate the used-game market, as GameStop and EB are currently the leaders for preowned games by a wide margin. However, that margin may soon close--Best Buy is currently testing out a used-game program in some of its California and Illinois stores.

Both GME and ELBO were up slightly on the day, 1.81 and .72 percent, respectively.

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