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article imageGameStop to Buy France's Micromania for $700 Million

By Owen Weldon     Oct 1, 2008 in Business
The world's largest video-game retailer, Gamestop Corp., agreed to buy France's Micromania for $700 million, including the debt, to enter Europe's second-biggest video game market.
Gamestop wants to speed growth in Europe and acquiring Micromania's 332 stores is part of Gamestop's plan to do so. This accusation swells Gamestop's European store count to more than 1,077, about a fifth of its total. Back in August the video game retail giant saud that expanding by acquisition in Europe was easier than opening stores because real estate is more scarce.
Gamestop has become less dependant on the U.S., where it trails Wal-Mart,the world's largest retailer, in U.S. video-game sales. In the past eight quarters the company boosted profit because customers around the world purchased games for Sony corp.'s playstation and Nintendo Co.'s wii consoles.
Gamestop released a statement today and said that the purchase will contribute to profit in its fourth quarter ending Jan. 31 and will help Gamestop increase earnings per share by 23 percent in the 12 months ending in early 2010.
Chris Olivera is a Gamestop spokesman and he would not say how much debt the company is assuming by purchasing Micromania.
Pierre Cuilleret, 41, will continue to head Micromania, according to Gamestop.
At 10:37 a.m. Gamestop rose 98 cents to $35.19 in New York Stock Exchange composite trading. Before today, the shares fell 45 percent this year.
Gamestop is buying Micromania from L Capital, which took control of the French company in 2005 after acquiring a minority stake in 2001. L Capital is sponsored by Paris-based LVMH Moet Hennessey Louis Vuitton SA, the World's largest luxury-goods company. L Capital is a private-equity fund with 600 million euros under management.
Back in July, Gamestop purchased The Gamesman and added eight stores in New Zealand and gained 49 locations in Norway after buying Free Record shop Norway back in March.When the deal closes, Gamestop will operate about 5,889 stores.
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