Take-Two announces acquisition of mobile games giant Zynga for $12.7bn

Grand Theft Auto dad or mum Take-Two has introduced its intention to accumulate cellular video games large Zynga in a deal price $12.7 billion – the largest ever within the video games trade.

The deal will see the mixture of Take-Two’s blockbuster console and PC franchises together with GTA, Borderlands, NBA 2K and BioShock, with Zynga’s massively standard social gaming manufacturers together with FarmVille and Phrases With Pals.

In an announcement, Take-Two mentioned the acquisition would set up it as “one of many largest and most diversified cellular recreation publishers within the trade”. Zynga has greater than 183 million month-to-month lively customers taking part in its cellular video games.

The corporate mentioned Zynga’s experience might assist it drive its free-to-play and cross-platform ambitions, and assist it convey Take-Two’s console/PC properties to cellular and add new recreation modes.

Following the acquisition, Frank Gibeau will proceed to function chairman and CEO of Zynga, whereas the administration group of Take-Two will lead the mixed firm.

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Zynga will oversee Take-Two’s personal cellular efforts going forwards, together with the T2 Cellular Video games enterprise, which is able to function below the Zynga model as its personal label inside the firm.

Take-Two’s current cellular choices embrace Dragon Metropolis, Monster Legends, Prime Eleven, Two Dots, and WWE SuperCard.

The Zynga deal represents the largest acquisition ever within the video games trade, eclipsing Tencent‘s funding in SuperCell ($8.6bn) and Microsoft’s buyout of Bethesda ($8.1bn).

Take-Two will purchase all the excellent shares of Zynga in a money and inventory transaction valued at $9.861 per Zynga share, with a complete enterprise worth of roughly $12.7 billion.

Below the phrases of the settlement, Zynga stockholders will obtain $3.50 in money and $6.361 in shares of Take-Two frequent inventory.

Because of the deal, Take-Two mentioned it expects cellular to comprise over 50% of its internet bookings in its fiscal 12 months 2023, as in comparison with an estimated 12% in FY 2022.

“We’re thrilled to announce our transformative transaction with Zynga, which considerably diversifies our enterprise and establishes our management place in cellular, the quickest rising section of the interactive leisure trade,” mentioned Strauss Zelnick, chairman and CEO of Take-Two.

“This strategic mixture brings collectively our best-in-class console and PC franchises, with a market-leading, diversified cellular publishing platform that has a wealthy historical past of innovation and creativity. Zynga additionally has a extremely gifted and deeply skilled group, and we look ahead to welcoming them into the Take-Two household within the coming months.”

Take-Two announces acquisition of mobile games giant Zynga for $12.7bn
Zynga is the creator of standard cellular video games together with FarmVille.

Frank Gibeau, CEO of Zynga added: “Combining Zynga’s experience in cellular and next-generation platforms with Take-Two’s best-in-class capabilities and mental property will allow us to additional advance our mission to attach the world via video games whereas reaching important development and synergies collectively.

“I’m happy with our group’s exhausting work to ship a robust end to 2021, with the most effective performances in Zynga’s historical past. We’re extremely excited to have discovered a companion in Take-Two that shares our dedication to investing in our gamers, amplifying our inventive tradition, and producing extra worth for stockholders.

“With this transformative transaction, we start a brand new journey which is able to permit us to create even higher video games, attain bigger audiences and obtain important development as a frontrunner within the subsequent period of gaming.”

The video games trade’s pandemic increase has seen a big rise in mergers and acquisitions.

In keeping with analysis by InvestGame, the worth of M&As within the video games trade exceeded $52 billion within the first three quarters of 2021. Key acquirers in 2021 had been Sony, Digital Arts, Tencent and Embracer Group.

That represents a 2.5x enhance on the $22 billion spent in 2020 – which was the largest 12 months since 2016 – which included the gross sales of ZeniMax to Microsoft and Codemasters to EA. The important thing acquirers in 2020 had been Tencent, Embracer Group, Stillfront and Zynga.

The report famous that as a result of video video games have outperformed many industries damage by the pandemic, private and non-private traders have began to focus on the trade as a perceived secure wager.