GameStop, a retail company specializing in video games and electronics, announced its intention to acquire eBay for $125 per share in cash and stock, $20 more than the shares were valued at when New York trading ended on Friday (via BBC). Overall, the company is ready to pay $55.5 billion for the deal.

If eBay's board rejects the offer, GameStop's CEO Ryan Cohen is prepared to take it directly to shareholders.

Cohen also promises to deliver $2 billion of cost reductions within a year of closing the deal, with $1.2 billion in sales and marketing only. He will become the CEO of the combined company and receive "no salary, no cash bonuses, and no golden parachute. He will be compensated solely based on the performance of the combined company."

GameStop will get $20 billion from TD Securities to buy eBay, putting it in debt. Retail industry analyst Sucharita Kodali believes it's not a "terribly good offer," as GameStop's debt will become eBay's as well.

"The truth is, we are not necessarily putting two strong companies together," Kodali told BBC. 

Following the news, eBay's shares jumped by over 13% on May 1, and GameStop's increased by around 4%.

What do you think this acquisition will bring?

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