Take Two Interactive has said it will buy mobile game company Zynga for $12.7 billion in a cash-and-share deal, marking the latest massive acquisition in a string of major deals in the video game industry.
The company announced that it will buy all Zynga shares at $9.86 per share, which is 64% higher than Zynga’s closing price on Friday, sending it flying 40% on Monday, while Take Tow’s stock plunged 13%.
Take Two reports that Zynga shareholders will receive $3.50 in cash and $6.36 of Take Two stock for each Zynga share they hold upon closing of the transaction, which still requires approval from shareholders and regulators and is expected to close on June 30, 2022.
Initially, Zynga rose to fame on Facebook with its Farmville game series, and at one point it became the most successful app development company on the platform, and in the years since, Zynga has turned its focus towards mobile phones as it seeks to amplify its business in the era of smartphones that has seen an explosion of growth.
Take Tow, which had $6.1 billion in net gaming bookings in the 12 months ending September 30, 2021, expects mobile phones to represent 50% of its net bookings during the next fiscal year, while they represented 12% of bookings for fiscal 2022.
Zynga expects that the deal will increase annual combined expenses by approximately $100 million during the first two years after closing, but increase net bookings by at least $500 million over time.