Infogrames Entertainment has announced a deal to buy Atari, rescuing the troubled company from its ongoing financial problems and giving Infogrames new opportunities for growth in North America.

Infogrames, already the majority shareholder with a 51.4 percent interest, will buy Atari outright in an all-cash deal worth approximately $11 million. As a result, Atari will become a wholly-owned subsidiary of the French publisher, leading to a simplified and more efficient operating structure. Infogrames has also agreed to loan $20 million to Atari to keep the company operating until the merger is closed.

“Bringing Atari U.S. and Infogrames businesses together will enable us to create a simplified global structure for our business as we seek to rebuild a well-managed, cohesive and financially disciplined company,” said Infogrames CEO David Gardner. “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.”

Current Atari CEO Jim Wilson, who will join the Infogrames board of directors and help lead the company’s growth in the North American market, added, “By joining Infogrames, we will have the opportunity to further transform Atari. As part of this newly integrated company, we will be better able to streamline operations and have a stronger platform for growth in North America.”

No financing conditions will apply because the acquisition is being funding by existing cash resources, but it does remain subject to “a number of customary conditions,” including the majority approval of outstanding shareholders. Since Infogrames already controls the majority of outstanding shares in Atari, this is not anticipated to be a problem. The merger is expected to close in the third quarter of 2008.

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