GameStop Proposes $56 Billion Acquisition of eBay: "Aiming to Become a True Amazon Competitor"

U.S. video game retailer GameStop has proposed to acquire e-commerce company eBay. GameStop plans to combine its offline store network with eBay's online business to create a powerful e-commerce company capable of competing with Amazon.

Reuters Yonhap News

On May 3 (local time), Ryan Cohen, CEO of GameStop, said in an interview with The Wall Street Journal (WSJ), "GameStop has secured about a 5% stake in eBay," adding, "We have presented an acquisition offer of $125 per share, to be paid in a mix of cash and stock." The total value of the acquisition is estimated at approximately $56 billion.

He stated, "eBay deserves to be valued much higher than it is today, and I believe it will be," adding, "I'm considering how to transform eBay into a company worth hundreds of billions of dollars." He also mentioned that, to secure funding, GameStop has obtained a debt financing commitment of up to $20 billion from TD Bank.

GameStop recently delivered an acquisition proposal to eBay. According to a letter from CEO Cohen to Paul Pressler, Chairman of eBay's Board of Directors, GameStop began purchasing eBay shares on February 4. The acquisition offer is comprised of 50% cash and 50% GameStop stock.

CEO Cohen believes that merging GameStop and eBay could provide opportunities to reduce costs and improve profitability. For example, GameStop's stores could be used as hubs for eBay sellers to drop off items and for authenticating genuine products. He also stressed that eBay should strengthen its live commerce sector, stating, "It could become a true competitor to Amazon."

However, the WSJ reported that there are significant hurdles to closing the deal. While GameStop holds about $9 billion in cash, it remains unclear how the company will secure the remaining funds needed for the $56 billion acquisition. Sources familiar with the matter say CEO Cohen may seek to attract external investors, such as Middle Eastern sovereign wealth funds.

CEO Cohen stated that if eBay rejects the proposal, he is prepared to launch a proxy battle and present the acquisition plan directly to shareholders. However, with eBay's annual general meeting of shareholders scheduled for June, the deadline for shareholders to nominate board candidates has already passed.

After acquiring a significant stake in GameStop in 2020, CEO Cohen criticized the company's slow transition to e-commerce and expanded his influence. In 2023, GameStop appointed Cohen, then board chairman, as CEO. Under Cohen's leadership, GameStop closed hundreds of stores and withdrew from significant portions of its overseas business, while restructuring operations to focus on high-margin products such as trading cards and retro games.

This content was produced with the assistance of AI translation services.