Take-Two Buys Zynga For $12.7 Billion

Owner of Rockstar Games and 2K, Take-Two buys Zynga in a massive deal

Announced in a press release this morning, Take-Two buys Zynga and takes ownership of the mobile game developer. This would be considered the biggest video game company buyout of all time, much larger than when Microsoft bought out Bethesda and ZeniMax Media in March 2021.

The two businesses have agreed that Take-Two will acquire all of Zynga’s shares and become the company’s sole owner. It is important to note that the deal has not officially closed as Zynga is allowed 45 days to look for a better deal with another company, in what is known as a “go-shop” provision.

After Take-Two buys Zynga, the deal could be the largest acquisition in video game history. Take-Two claims Zynga is  “one of the largest and most diversified mobile game publishers in the industry.” If you are familiar with Words With Friends, Farmville, and Harry Potter: Puzzles and Spells – they were all produced by Zynga. They also are in the works of developing Star Wars Hunters, a Nintendo Switch and mobile game slated for release in 2022.

Even after inflation, the $12.7 billion valuation surpasses Tencent’s $8.6 billion purchase of Supercell and Microsoft’s $8.1 billion purchase of ZeniMax Media and Bethesda. Take-Two buys Zynga with a lot of upside as the $9.861 per share it paid for the company marks a 64% premium over Zynga’s closing share price on January 7.

Zynga CEO Frank Gibeau noted that Take-Two helps the company advance their objective of connecting the world via video games while generating tremendous growth as a group. “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,” stated Gibeau.

Take-Two also revealed that mobile will account for more than half of the company’s future earnings, demonstrating how crucial it is to the company. Although we may believe console and PC games are more popular overall, the video game industry‘s fastest growing segment is mobile.

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