Blockbuster Deal Sends Zynga Shares Up 44% After Take-Two Announces $12.7 Billion Take Over

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Top Line

Video game company Take-Two Interactive, known for “Grand Theft Auto,” “NBA 2K” and “Red Dead Redemption,” announced Monday that it is buying mobile gaming company Zynga in a $12.7 billion deal. One of the biggest acquisitions in the industry. to date.

important facts

take two announced That it would acquire all outstanding shares of Zynga in a cash and stock deal for $9.86 per share, a more than 60% premium over Zynga’s closing price last Friday.

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Shares of Zynga rose 44% on the news, while Shares of Take-Two fell nearly 15%.

Zynga, which was down 35% in 2021, is known for its popular mobile games, including “FarmVille,” “CSR Racing” and “Words with Friends.”

Blockbuster is a logical move for the $12.7 billion Take-Two, which is looking to further cement its position in the fast-growing mobile gaming segment, where consumer spending has been outpacing console and computer games in recent years.

Zynga cofounder, Mark Pincus, jumped on the news Monday after his net worth jumped to more than $150 million, taking his net worth to nearly $1.5 billion. Businesshala‘ an estimate.

The deal, which will still need to obtain regulatory and shareholder approval, is expected to close by June 30, 2022.

Main background:

Take-Two’s acquisition of Zynga united the two top gaming companies with cult followings. What’s more, it’s the latest of several major deals within the video game industry over the past year, including Microsoft’s $7.5 billion deal for Bethesda-parent ZeniMax Media and Electronic Arts’ $2.1 billion deal for Glu Mobile. is included.

What to look for:

The combined company will be one of the largest gaming companies overall, with estimated sales of $6.1 billion and approximately $800 million in operating cash flow. Press release, Take-Two also said that Zynga will help adapt many of its popular console game franchises for mobile.

Important Quote:

Take-Two CEO Strauss Zelnick said in a statement, “This strategic combination brings together our best-in-class console and PC franchises with a market-leading, diverse mobile publishing platform that has a rich history of innovation and creativity. ” He will continue to head the company after the merger of the two companies later this year.

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