Take-Two Interactive, the video game holding company which owns Rockstar and 2K Games, is acquiring Zynga, known for developing social games on mobile and social media platforms. In this deal, Zynga is valued at US$12.7 billion, and is a move away from the type of games Take-Two is known for.
Take-Two announced on 10 January that it would acquire all outstanding shares of Zynga at US$9.86 apiece, which is a 64% premium to Zynga’s closing price on 7 January. Zynga shareholders will receive US$3.50 in cash and US$6.36 in Take-Two stock for each share of Zynga.
Take-Two is known for game series such as Grand Theft Auto, Red Dead Redemption, BioShock, and Borderlands, while Zynga is known for popular social games such as FarmVille and Words With Friends. This likely marks Take-Two’s foray into the mobile game market that aims to Take-Two’s intellectual property to a wider audience while increasing accessibility.
This US$12.7 billion acquisition is primed to be the biggest one in video game history so far, dwarfing Microsoft’s US$7.5 billion acquisition of Bethesda and Tencent’s US$8.57 billion majority stake acquisition in Supercell.
Still, given the reputation of mobile games as more Skinner boxes than fun games, gamers can’t help but feel some trepidation about what this acquisition holds for the future of Take-Two’s catalogue. Of course, the deal is not sealed yet, and Zynga can shop for another prospective buyer.