Take-Two Interactive has unveiled a definitive agreement that will see the New York headquartered firm purchase Zynga in a cash and stock transaction valued at $9.861 per Zynga share, based on the market close as of January 7, 2022, with a total enterprise value of approximately $12.7bn.
Under the terms and subject to the conditions of the agreement, Zynga stockholders will receive $3.50 in cash and $6.361 in shares of Take-Two common stock for each share of common stock outstanding at closing. The purchase represents a premium of 64 per cent to the group’s closing share price on January 7, 2022.
“We are thrilled 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,” explained Strauss Zelnick, chair and CEO of Take-Two.
“This strategic combination brings together our best-in-class console and PC franchises, with a market-leading, diversified mobile publishing platform that has a rich history of innovation and creativity.
“Zynga also has a highly talented and deeply experienced team, and we look forward to welcoming them into the Take-Two family in the coming months.
“As we combine our complementary businesses and operate at a much larger scale, we believe that we will deliver significant value to both sets of stockholders, including $100m of annual cost synergies within the first two years post-closing and at least $500m of annual net bookings opportunities over time.”
The purchase, lauded as a unity of “two global leaders” of interactive entertainment, is expected to deliver in the region of $100m of annual cost synergies within the first two years after closing.
The transaction is expected to be finalised during the first quarter of Take-Two’s 2023 fiscal year, ending June 30, 2022, subject to the consent of stockholders of both firm’s, as well as the satisfaction of customary closing conditions, including applicable regulatory approvals.
The transaction has been unanimously approved by the boards of directors of both Two-Take and Zynga, with each director and executive officer also having entered into voting agreements to support the transaction.
“Combining Zynga’s expertise in mobile and next-generation platforms with Take-Two’s best-in-class capabilities and intellectual property will enable us to further advance our mission to connect the world through games while achieving significant growth and synergies together,” commented Frank Gibeau, CEO of Zynga.
“I am proud of our team’s hard work to deliver a strong finish to 2021, with one of the best performances in Zynga’s history. 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.”
The Take-Two portfolio includes brands such as Grand Theft Auto, Red Dead Redemption, Mafia, and NBA 2K, while Zynga’s network boasts Game of Thrones Slots Casino and Zynga Poker, in addition to CSR Racing, Empires & Puzzles, FarmVille, and more.