Take Two’s acquisition of Zynga is the latest transaction in an industry-wide trend of game studios looking to build and expand their mobile portfolios.
Take-Two Interactive, the maker of Grand Theft Auto, is buying Zynga, creator of Farmville and Words with Friends, in a $ 12.7 billion cash and stock deal, the company said on Monday.
The acquisition aims to capitalize on a wave of mobile games by bringing together Take-Two’s expertise in console games with Zynga’s huge success in games on the go.
Take-Two, also known for Red Dead Redemption, offered $ 9.86 per share, a 64% premium over Zynga’s last closing price. By mid-morning Monday, Zynga shares had already climbed nearly 46% to $ 8.75. Take-Two fell more than 14%.
“This strategic combination brings together our best console and PC franchises, with a diverse and market-leading mobile publishing platform that has a rich history of innovation and creativity,” said Strauss Zelnick, CEO of Take- Two. declaration.
Take-Two’s acquisition of Zynga will help it tap into the latter company’s near-cult following among gamers.
“The combination of Zynga’s expertise in the mobile realm and our next-generation platforms with the best capabilities and intellectual property of Take-Two is a game-changing opportunity for our industry,” said Monday morning. Zynga’s Twitter profile.
Video games saw a significant increase in demand during the lockdown and restriction days of the coronavirus pandemic, when millions of people at home with little else to do remained glued to their own. TV, streaming shows, movies or playing video games. While the restrictions have been lifted, people continue to play video games, but now on the go and on their mobile devices.
The Take-Two / Zynga deal follows Electronic Arts’ $ 2.4 billion acquisition of Glu Mobile last year.
Take-Two said in a statement Monday that it expects around $ 100 million in annual cost savings in the first two years after the deal is closed, and more than $ 500 million in revenue. adjusted over time.
The games company is expected to increase its board of directors to 10 members after the deal closes, adding two members to Zynga’s board.
The transaction includes a shopping provision, which gives Zynga 45 days to hear further arguments.
The deal is expected to close in Take-Two’s first quarter of fiscal 2023, ending June 30, according to the company.
After gaining approval from the Boards of Directors of Take-Two and Zynga, the deal is now awaiting the green light from shareholders of both companies.