Take Two’s acquisition of Zynga is the latest transaction in an industry-wide trend for game studios seeking to build and expand their mobile product portfolio.
The company said on Monday that Take-Two Interactive, the maker of Grand Theft Auto, will acquire Farmville and Words with Friends creator Zynga for $12.7 billion in cash and stock transactions.
The acquisition aims to capitalize on the proliferation of mobile games by combining Take-Two’s strong expertise in console gaming with Zynga’s large following in the mobile gaming space.
Take-Two is also known for Red Dead Redemption, at $9.86 per share, a 64% premium to Zynga’s final closing price. By Monday morning, Zynga’s stock price had soared nearly 46% to $8.75. Take-Two fell more than 14%.
Take-Two CEO Strauss Zelnick said in the news: “This strategic combination combines our first-class console and PC franchise with a market-leading diversified mobile publishing platform that is rich in innovation and creativity. Force history.” statement.
Take-Two’s acquisition of Zynga will help it capitalize on the latter’s almost fanatical following among gamers.
“Combining Zynga’s expertise in mobile and our next-generation platform with Take-Two’s best-in-class capabilities and intellectual property rights is a game-changing opportunity for our industry,” Zynga’s Twitter profile Monday morning Say.
During the lockdown and restriction days of the coronavirus pandemic, the demand for video games has grown significantly, when millions of people had nothing to do at home, still focusing on TV, streaming shows, movies or playing video games. With the lifting of restrictions, people continue to play video games, but now, on the go and on mobile devices.
The Take-Two/Zynga deal was concluded after Electronic Arts acquired Glu Mobile for US$2.4 billion last year.
Take-Two said in a statement on Monday that it expects to save approximately US$100 million in annual costs within the first two years after the transaction is completed. Over time, adjusted revenue will exceed US$500 million.
After the transaction is completed, the board of directors of the game company is expected to increase to 10 people, including two members from the Zynga board of directors.
The deal includes a store clause that gives Zynga 45 days to listen to other recommendations.
According to the company, the transaction is expected to be completed in the first quarter of Take-Two’s 2023 fiscal year ending June 30.
After being approved by the boards of Take-Two and Zynga, the transaction is now awaiting approval from the shareholders of the two companies.