GameStop

(GME) - Get Report

agreed to acquire rival video-game retailer

Electronics Boutique

(ELBO)

Monday for cash and stock worth about $1.37 billion.

The takeout price comes out to about $55.18 per share of Electronics Boutique, a fairly rich 34.2% premium to the Friday closing price of $41.12. Terms call for GameStop to exchange $38.15 cash plus 0.78795 of a class A share, worth about $17.03 based on Friday's closing price of $21.61.

The combined company, to be called GameStop, will have about 3,800 stores worldwide with annual revenue of about $3.8 billion. GameStop sees the transaction adding to per-share earnings "significantly" starting in the second half of the current fiscal year.

Two big shareholders, James Kim, who controls about 47% of Electronics Boutique's voting shares, and Leonard Riggio, who controls 16% of GameStop's voting shares, agreed to vote in favor of the transaction. The takeover is also subject to a U.S. antitrust review.