Take-Two Interactive acquires FarmVille creator Zynga for USD 12.7 billion

A sign at the Zynga headquarters in San Francisco, California, on Wednesday, August 4, 2021. Zynga Inc. is expected to release earnings data on August 5.

David Paul Morris | Bloomberg | Getty Images

Take two interaction Is acquiring a mobile gaming company Zynga At a price of US$12.7 billion, it marks the latest blockbuster acquisition in a series of major transactions in the video game industry.

The company announced on Monday that it will acquire all of Zynga’s outstanding shares at a price of $9.86 per share, a 64% premium to Zynga’s closing price on Friday. Zynga’s share price soared 49% in pre-IPO trading in the United States.

Strauss Zelnick, CEO of Take-Two, said in a statement: “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 the history of creativity.” Press release.

Zynga is well-known for its FarmVille series of mobile games, initially in Facebook, Once became the most successful application developer on the platform.

In the next few years, Zynga shifted its focus to the mobile field, hoping to take advantage of the explosive growth of the smartphone era.

Although the company is seen as the main beneficiary of the stay-at-home trend brought about by Covid-19, its share price has fallen by nearly 38% in the past year, and some investors question whether the pandemic gaming boom will last for the semester.

Although FarmVille is Zynga’s most well-known game, it has published several other well-known games, including CSR Racing, Empires & Puzzles and Harry Potter: Puzzles & Spells, which is based on Warner Bros. Harry Potter series.

Strauss stated that he expects the transaction to create $100 million in annual cost synergies within the first two years after the transaction is completed, and that over time, the potential net booking volume will reach at least $500 million.