GameStop Proposes $56 Billion eBay Takeover to Challenge Amazon
AMZN•GameStop proposed a $55.5 billion takeover of eBay by offering $125 per share, a 46% premium, funded with $20 billion in TD Bank debt and $9.4 billion in cash. The deal targets $2 billion in annual cost cuts to lift eBay’s EPS from $4.26 to $7.79, aiming to rival Amazon.
1. GameStop's $56 Billion Bid
GameStop has offered $125 per share in a mix of stock and cash to acquire eBay for about $55.5 billion, representing a 46% premium over pre-offer prices. CEO Ryan Cohen intends to merge the businesses to create a legitimate competitor to Amazon.
2. Financing and Cash Reserves
The acquisition is backed by a $20 billion financing commitment from TD Bank alongside GameStop’s $9.4 billion cash reserves as of January 31. Additional funding may come from external investors, including sovereign-wealth funds.
3. Projected Cost Synergies
The companies project $2 billion in annualized cost savings within 12 months of closing, which would boost eBay’s comparable-store EPS from $4.26 to $7.79 in the first year. These synergies are central to justifying the acquisition’s valuation.
4. Implications for Amazon
By transforming eBay into a larger e-commerce rival, Cohen aims to challenge Amazon’s market dominance. The combined entity would leverage GameStop’s retail footprint and eBay’s platform to intensify competition in online shopping and live commerce.
