The world's largest games retailer GameStop has made a major stride into the European marketplace with a shock deal to acquire French chain Micromania.
The deal gives the US giant 332 stores in France, increasing GameStop's European store count to 1,077.
The transaction is worth approximately $700 million (€480m) and marks GameStop's first move into the French games retail market. The deal is subject to clearance by the European Commission and is expected to be closed by November this year.
As we have accelerated our growth in Europe over the years, we have kept a close eye on the European retailers whose passion for the business is reflected in the quality of their stores and evident knowledge of their staff,” said R. Richard Fontaine, GameStop's executive chairman. Micromania has been that type of retailer.”
When the opportunity arose to purchase Micromania, and after meeting the executives who lead the company, we became convinced that expanding into Europe's second largest video game market with Micromania's management team and GameStop's diverse experience was a great combination for profitable growth.”
GameStop CEO Daniel A. DeMatteo also confirmed that Europe is to be a key battleground for the rapidly expanding retailer.
"The transaction is a reflection of our belief that the European video game market is growing and will be an important part of GameStop's worldwide growth.”
"Historically, our most productive use of capital has, by far, been the addition of new stores whether opened organically or acquired. With the addition of Micromania, we have begun deployment of capital that we believe will help us achieve EPS growth of 25 per cent or more in fiscal 2009, and set GameStop up for continued growth in the years to come. We expect this acquisition to be accretive to our fully diluted EPS in both the fourth quarter of fiscal 2008 and fiscal 2009."
Pierre Cuilleret, who will remain Micromania's president directeur general, added: "Micromania is a terrific brand. I am particularly pleased that the GameStop management team recognized the impassioned quality and importance of our sales advisors and senior managers."
"With GameStop as a partner, and with their history of seeking out new growth opportunities, I am very enthusiastic about our potential to expand the brand that has been built for over 25 years in France."