Take-Two Interactive, one of the largest publishers of video games with hits such as Grand Theft Auto and Rockstar, announced it has agreed to acquire social gaming giant Zynga in a deal valued at $12.7 billion.
Take-Two will pay $3.50 in cash and $6.36 worth of shares of Take-Two stock for every Zynga share. The price, a combined $9.86 per share, is 64.3 percent more than Zynga’s $6 closing share price on the day of the announcement.
“We are thrilled to announce our transformative transaction with Zynga, which significantly diversifies our business and establishes our leadership position in mobile, the fastest-growing segment of the interactive entertainment industry,” said Take-Two Chairman and CEO Strauss Zelnick. “This strategic combination brings together our best-in-class console and PC franchises with a market-leading, diversified mobile publishing platform that has a rich history of innovation and creativity.”
“Combining Zynga’s expertise in mobile and next-generation platforms with Take-Two’s best-in-class capabilities and intellectual property will enable us to further advance our mission to connect the world through games while achieving significant growth and synergies together,” Zynga CEO Frank Gibeau said.
“We are incredibly excited to have found a partner in Take-Two that shares our commitment to investing in our players, amplifying our creative culture, and generating more value for stockholders. With this transformative transaction, we begin a new journey which will allow us to create even better games, reach larger audiences and achieve significant growth as a leader in the next era of gaming.”
Following shareholder and regulatory approval, the deal is expected to close in the quarter ending June 30, which is the first quarter of Take-Two’s financial year. Current Zynga management will continue to operate the brand under the Take-Two umbrella.
The combination is expected to create a business that will bring in $6.1 billion annually in net bookings, a total expected to grow by 14 percent per year.
