When it comes to the video game industry, company acquisitions have started to become the norm. As the game industry continues to grow, publishers such as Sony, Microsoft, Nintendo Square Enix, Ubisoft, and Capcom look for new games to help grow their market share. With looking to expand these companies purchase other companies that have a proven track record of consistency. Within the last five years, ZeniMax (Microsoft), Insomniac Games (Sony), Harmonix (Epic Games), Turtle Rock Studios (Tencent), and Gearbox Software (Embracer Group) are just a few of the notable companies falling under new management. Now, Take-Two interactive has announced its next potential acquisition, Zynga. Zynga has 45 days to receive any additional offers.
Today, Take-Two Interactive announced its intent to purchase Farmville and Words with Friends creator, Zynga. the offer is currently in writing but is not expected to close until June 30th, 2022 at the earliest. In the offer, Take-Two Interactive agreed to acquire all outstanding shares of Zynga; this offer would buy each share for $9.86 ($3.50 Cash & $6.36 in Take-Two Common Stock). This will result in around a $12.7 billion dollar acquisition. The $12.7 billion purchase price represents 64% of the closing share price. Upon the closing of the acquisition, Take-Two Interactive’s Board of Directors will expand from 8 to 10 members. So, Take-Two Interactive will have two Zynga Board of Directors added to the group.
Take-Two Interactive’s Acquisition Statement
Take-Two CEO Strauss Zelnick had this to say about the acquisition.
“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. 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. Zynga also has a highly talented and deeply experienced team, and we look forward to welcoming them into the Take-Two family in the coming months. As we combine our complementary businesses and operate at a much larger scale, we believe that we will deliver significant value to both sets of stockholders, including $100 million of annual cost synergies within the first two years post-closing and at least $500 million of annual Net Bookings opportunities over time.”
Zynga CEO Frank Gibeau, a former executive at Electronic Arts, stated,
“joining forces with Take-Two allows the company to further advance our mission to connect the world through games while achieving significant growth and synergies together.
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.”
What do you think of Take-Two Interactive‘s acquisition of Zynga for $12.7 billion dollars? If you look into Zynga, they have a variety of studios under their name than you might expect. Could we see a Red Dead Redemption Farmville in the future?