GameStop ( GME) reached a deal to buy Micromania, a video game retailer in France with 332 locations throughout the country, for $700 million in cash from private equity fund L Capital.

GameStop currently has no locations in France. But with the acquisition of Micromania, GameStop will have almost 1,100 stores in France, Italy and other European countries, the company said in a statement Wednesday. GameStop has 5,900 locations worldwide.

The transaction, which includes the assumption of debt, is subject to clearance by the European Commission, and is expected to close in November. GameStop said it intends to fund the acquisition through cash on hand, a draw on its credit line, and a $150 million term loan.

GameStop said the addition of Micromania will help it achieve earnings-per-share growth of 25% or more in fiscal 2009. The company expects the acquisition to be accretive to per-share earnings in the fourth quarter of fiscal 2008 and fiscal 2009.

Shares of GameStop closed Tuesday at $34.21.

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