New Delhi: Take-Two Interactive said on Monday it would buy Zynga for $ 11.04 billion in an agreement that would bring the video game smash-hit “Grand Theft Auto” and Mobile-Friendly “Farmville” under an affordable roof of a gamete surge Go.
The agreement, one of the largest in this sector, will make a console spanning powerhouse gaming, PC and cellular devices and comes when people are increasingly interested in smartphone games.
Take-Two, also known as the “Red Dead Redemption” adventure game, offering $ 9.86 per share for an agreement, representing 64% premium to the last zynga closing price.
Including debt, this acquisition is worth $ 12.7 billion.
“This bomb agreement …
Zynga is in the potential list of potential M & A for a long time in the video game business,” said Serkan Toto, CEO of Videogame Consulting Firm Kantan Games.
“Take-two is looking at the industrial map and says ‘we are basically not here.’ So, many people have expected take-two to make big trouble on cellphones to close gaps with competitors such as electronic art for example.
“Electronic arts bought Glu Mobile for $ 2 billion last year.
Zynga himself has made a series of acquisitions in the past two years, including Echtra and Chartboost.
The cellular gaming sector is expected to reach a market size of $ 116.4 billion in 2024, growing at an annual growth rate of compounds of 11.2% from 2019 to 2024, according to the Gaming Newzoo market data company.
Dealmaking Aggressive Zynga and Apple Movement to allow iPhone users to get out of tracked by denters in the company, remove 35% of their value in 2021.
It also skipped Wall Street’s profit target in the last three quarters.
“This is a large price label for companies that have not produced profit or new blockbuster,” said Erik Gordon, professor at Ross School of Business, University of Michigan.
Take-two has financing $ 2.7 billion from JP Morgan and intends to fund the rest with cash and new debt issuance.
It expects around $ 100 million in annual cost savings in the first two years, and more than $ 500 million is a clean order from time to time when the agreement is closed in mid 2022.