Take-Two Interactive to Buy Zynga in a $13 Billion Deal

Take-Two Interactive arranged a deal to acquire developer Zynga for a total enterprise value of $12.7 billion. Take-Two said it will acquire all outstanding Zynga shares for $9.86 each, representing a 64 percent premium on its closing share price on 7 January.

The gaming company expects approximately $100 million of annual cost synergies within the first two years of closing and also identified more than $500 million of incremental annual net booking opportunities to unlock over time through the creation of new mobile games using its IP, in addition to other strategic plays. The company positioned the deal as a combination of two global leaders in the interactive entertainment business. Zynga’s portfolio includes FarmVille, CRS Racing, and Golf Rival.

The deal, the largest ever in the sector, will create a gaming powerhouse with a market cap of nearly $30 billion, spanning console, PC, and mobile devices at a time when more people are gaming on their smartphones. Take-Two also talked up the potential of mobile gaming as a whole, stating it was the fastest-growing segment within the industry. Chairman and CEO Strauss Zelnick said the deal helped establish a leadership position in mobile. The deal is expected to close later this year.