Take-Two Interactive, the maker of Grand Theft Auto, is buying Zynga, the 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 rise in mobile gaming, bringing together Take-Two's expertise in console gaming with Zynga's massive following in gaming on the go.
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Take-Two's Interactive Investment:
Take-Two, also known as Red Dead Redemption, offered $9,86 a share, representing a 64% premium over Zynga's last closing price. By mid-morning Monday, Zynga's stock had already risen nearly 46% to $8,75. Take-Two is down 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 TakeTwo CEO Strauss Zelnick in a press release.
Take Two's acquisition of Zynga will help it tap into the latter company's near-cult following among gamers. "Combining Zynga's experience on mobile devices and our next-generation platforms with Take-Two's best resources and intellectual property is a game-changing opportunity for our industry," Zynga's Twitter profile said Monday morning. fair.
Video games have seen a significant increase in demand during the lockdown and restriction days of the coronavirus pandemic, when millions of people at home with not much else to do were glued to their televisions, streaming shows, movies or video games. As restrictions have been lifted, people continue to play video games, but now, on the go and on their mobile devices.
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The Take-Two/Zynga deal follows Electronic Arts' $2,4 billion acquisition of Glu Mobile last year. Take-Two said Monday in a statement that it expects about $100 million in annual cost savings in the first two years after the deal closes and more than $500 million in adjusted revenue over time.
The gaming company is expected to increase its board to 10 members upon completion of the deal, adding two Zynga board members. After getting approval from both Leva Two and Zynga's boards, the deal is now awaiting shareholder approval from both companies.
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