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FarmVille maker Zynga bought by Take-Two for $ 12.7 billion

Take-Two announced Monday that it is buying Zynga in a cash and stock deal valued at $ 12.7 billion, including debt. The deal values ​​Zynga at $ 9.86 per share.

Actions of Zynga (ZNGA) soared over 40% on the late afternoon news, while Take two (OF THEM) sank almost 15%.

The deal gives Take-Two a greater presence in the lucrative world of mobile gaming, expanding its business beyond the console and PC games it is primarily known for, including NBA 2K, Red Dead Redemption, and the GTA series. .

“We are delighted 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,” said Strauss Zelnick, CEO of Take-Two, in a statement. .

For Zynga, the takeover gives the company a richer relative in the gaming business who can help it grow.

Zynga went public in 2011 at $ 10 a share, but the stock has languished since then. Part of that is due to the fickle nature of the mobile gaming industry – a decade later, it’s Roblox that is all the rage.
But it’s also because Facebook (FB) (now known as Meta Platforms) and Zynga signed a new business deal in 2012 that reduced Zynga’s dependence on Facebook for its revenue. It hurt Zynga.

Zynga hopes that the merger with Take-Two will lead to more growth opportunities.

“Combining Zynga’s expertise in mobile and next-gen platforms with Take-Two’s best-in-class capabilities and intellectual property will allow us to advance our mission of connecting the world through games while achieving growth. significant, ”said Frank Gibeau, CEO of Zynga in a statement.

The Zynga / Take-Two handset should be able to compete more effectively with Roblox, whose shares have skyrocketed since the company listed its shares directly on the New York Stock Exchange last year.
Take-Two is also in competition with Electronic arts (EA) and Activision Blizzard (ATVI) in the general public games market Nintendo (NTDOF) Change, Microsoft (MSFT) Xbox and PlayStation Sony consoles.


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