Troubled online retailer Egghead.com Inc is to merge with Onsale Inc. The companies claim combined sales of $500m and $160m in cash reserves as of March 1999. Executives say that with 3 million unique monthly visitors between them and 2.8 million combined customer records, the merged companies will form the number one online technology retailer.
On the internet, scale and brand matter, explained Onsale CEO Jerry Kaplan, who will also be chief executive of the new company. Our plan is simple: combine two top technology retailers to create a clear market leader. The new company will operate out of Menlo Park, California under the name Egghead.com. The Onsale.com site will be relegated to auctions and sales of surplus goods.
Each share in Egghead.com will be exchanged for .565 shares in Onsale in a transaction worth an estimated $400m. Egghead.com shareholders will end up owning 47% of the combined company. The merger will be accounted for as a pooling of interests and is subject to approval by shareholders of both companies and by regulators.
