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Wednesday, January 26, 2022

Grand Theft Auto maker buys FarmVille for $12.7 billion

Take-Two Interactive, maker of Grand Theft Auto and Red Dead Redemption, is buying Zynga, maker of FarmVille and Words With Friends, in a cash and stock deal worth about $12.7 billion.

The acquisition, announced on Monday, will merge console gaming company Take-Two with a mobile gaming company with a near-cult following.

Zynga shareholders will receive $3.50 in cash and $6.36 in Take-Two common stock for each Zynga share outstanding at the close of trading. The deal is valued at $9.86 per Zynga common share.

“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,” Take-Two Chairman and CEO Strauss Zelnick said in a prepared report. statement. He will retain these roles when the companies become one.

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Take-Two expects the deal will help create mobile versions of some games for consoles and personal computers.

Take-Two said on Monday it expects about $100 million in annual cost savings over the first two years after the deal closes.

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Zynga CEO Frank Guibaut and its president of publishing Bernard Kim will oversee the integration and day-to-day operations of the combined Zynga and T2 mobile games business, which will operate under the Zynga brand as its own label under Take-Two. .

Take-Two will also expand its board to 10 members after the closing, adding two members from Zynga’s board of directors.

The deal includes a move-to-store clause that gives Zynga 45 days to consider alternative offers.

The deal is expected to close during the first quarter of Take-Two’s fiscal year 2023 ending June 30th. It still needs approval from Take-Two and Zynga shareholders. He received the approval of the boards of directors of both companies.

Shares of San Francisco-based Zynga Inc. jumped 52.5 percent to $9.15. Shares of New York-based Take-Two Interactive Software, Inc. fell 8.7% to $150.25.

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