Mark Androvich 00:59 (BST)
01/05/2008

Infogrames has agreed to acquire Atari Inc for USD 11 million.

Atari Inc will be come a wholly-owned subsidiary of Infogrames, which is currently the company's largest stockholder.

Infogrames made an offer to purchase Atari Inc in early March. Atari Inc asked for an extension of the original March 11 deadline to decide whether or not to accept the offer.

Infogrames also recently confirmed that it had made an offer to acquire SCi which was rejected.

In addition to purchasing all outstanding shares of Atari Inc, Infogrames has committed to lending the company USD 20 million to fund operational cash requirements during the period between the date of the merger agreement and its closing.

"Bringing Atari US and Infogrames businesses together will enable us to create a simplified global structure for our business as we seek to re-build a well-managed, cohesive and financially disciplined company," said Infogrames CEO David Gardner in a statement.

"This is a key strategic event for Infogrames that will benefit all of our shareholders. I believe that this transaction will generate significant benefits for the Group."

The management of Atari Inc, led by recently-appointed president and CEO Jim Wilson will join Infogrames upon the closing of the transaction which is expected to take place in the third quarter of calendar year 2008.