The nation's two largest videogame retailers announced today that their companies have reached an agreement to merge. GameStop is taking the primary position, merging EB into their corporation and the new company will remain named GameStop Corp.

Under the terms of the agreement, Electronics Boutique Holdings Corp. (Electronics Boutique) shareholders will receive $38.15 in cash, plus the equivalent of 0.78795 shares of GameStop Corp. (GameStop) Class A common stock for each share of Electronics Boutique. Based on the closing price of GameStop's Class A common stock of $21.61 on Friday, April 15, 2005, the stock component of the per share merger consideration is $17.03. The total merger consideration per share of $55.18 represents a 34.2% premium to the closing price of Electronics Boutique's stock as of Friday, April 15, 2005. The total transaction value is approximately $1.44 billion with consideration consisting of approximately 70% cash and 30% common stock. GameStop intends to fund the cash portion of the transaction through the issuance of $950 million in senior bonds and excess cash.

Comments by both CEOs reveal that the motivation behind the merger was to compete on a global scale, something both felt couldn't be done alone. However, I bet money was a big factor, too. Oh, and in other buyout news, Adobe bought Macromedia.