Blockbuster announced this Monday morning that it has put in a bid to acquire the struggling electronics retailer Circuit City chain for at least $6/share, a 54% premium over CC's April 11 closing price.

According to documents provided by Blockbuster, the Blockbuster/Circuit City combination will be an $18 billon entity, with a little over 9,000 stores worldwide. Blockbuster Chairman and CEO Jim Keyes called this new company Blockbuster Media and it will be a "game changer," he said.

Blockbuster originally proposed this merger on February 17, 2008, but Circuit City didn't move at a speed to Blockbuster's liking, so Blockbuster hoped this public announcement could spur the electronic retailer along.

What does this mean?
In short, Blockbuster wants a piece of the action in how and when people consume content.

In their minds, when people buy a media device from Circuit City, they'll be asked, "Would you like a subscription, DVD, game or set-top box with that?"

Why not partner with electronic retailers instead?
Keyes believes there are too many challenges with partnerships.

Why Circuit City?
Best Buy and Wal-Mart are too expensive.

Will this combined company succeed?
Best guess is no. When you're yourself a struggling company, it's really unwise to fight battles on too many fronts. In a couple of years, Blockbuster will sell off the Circuit City stores to "focus on its core business."

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