Take Two’s acquisition of Zynga is the latest in an industry-wide trend of gambling studios looking to build and expand their mobile portfolios.
Take-Two Interactive, the maker of Grand Theft Auto, is buying Farmville and Words with Friends creator Zynga in a $ 12.7 billion cash-and-stock deal, the company said Monday.
The acquisition aims to exploit a boom in mobile games by bringing Take-Two’s powerhouse expertise into console games alongside Zynga’s massive adherence to games on the go.
Take-Two, also known as Red Dead Redemption, offered $ 9.86 per share, representing a 64 percent premium to Zynga’s latest closing price. By Monday afternoon, Zynga’s shares had risen nearly 46 percent to $ 8.75. Take-Two’s fell more than 14 percent.
“This strategic combination brings together our best-in-class console and computer franchises, with a market-leading, diversified mobile publishing platform that has a rich history of innovation and creativity,” Take-Two CEO Strauss Zelnick said in a news release said. statement.
Take-Two’s acquisition of Zynga will help it exploit among the latter’s almost cult-like following among players.
“The combination of Zynga’s expertise in mobile and our next generation platforms with Take-Two’s best-in-class capabilities and intellectual property is a game-changing opportunity for our industry,” Zynga’s Twitter profile said Monday morning.
Video games experienced a significant increase in demand during the shutdown and restriction days of the coronavirus pandemic when millions of people at home with not much else to do remained stuck before playing their televisions, streaming programs, movies or video games. As restrictions have 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 on Monday that it expects about $ 100 million in annual cost savings within the first two years after the transaction went through, and more than $ 500 million in adjusted revenue over time.
The gambling company is expected to grow its board to 10 members after the transaction goes through, adding two members of Zynga’s board.
The deal includes a go-shop stipulation, which gives Zynga 45 days to hear other pitches.
According to the company, the deal is expected to close during the first quarter of Take-Two’s fiscal 2023, ending June 30.
Following the approval of both Take-Two and Zynga’s boards, the transaction is now awaiting the green light from both companies’ shareholders.