(Reuters) – Electronic Arts Inc. announced on Monday that it would buy Glu Mobile Inc for $ 2.4 billion, reinforcing its mobile platform with the addition of games such as “Design Home”, “Covet Fashion” and “MLB Tap Sports Baseball “.
The US video game developer offered $ 12.50 in cash for each share of Glu, a premium of about 33% compared to Monday’s closing price. Electronic Arts (EA) shares rose 1.4% in extended trading, while Glu shares rose 34%.
The deal, which is expected to close in the quarter ended June 30, gives Glu a business value of $ 2.1 billion.
Glu, based in San Francisco, received several takeover bids last year as its shares underperformed those of its competitors, said a source familiar with the situation.
EA, known for its sports games franchise, hopes to expand its mobile game titles through the acquisition and attract more players through Glu’s portfolio of casual games, including “Kim Kardashian: Hollywood”.
EA is on a buying spree as it is on a strong balance sheet and appears to be growing with more game titles. In December, it acquired Codemasters from the United Kingdom for $ 1.2 billion. [nL4N2IU1P1]
Video game sales in the United States reached a record $ 56.9 billion last year, according to research firm NPD, as demand for virtual entertainment skyrocketed after major public events were canceled to stem the spread. of the new coronavirus.
Global gaming revenue grew 13.3% last year, faster than PC and console games, data from analyst firm Newzoo showed.
The gaming industry has seen a number of consolidations in recent months, including Microsoft’s $ 7.5 billion acquisition of ZeniMax Media and Swedish video game group Embracer buying Gearbox and Easybrain.
Earlier this month, EA increased its prospects for annual sales, betting on strong sales of its sports titles, including “FIFA 21” and “Madden NFL 21”.
JP Morgan advised EA on the deal, while Goldman Sachs, Morgan Stanley and UBS Securities advised Glu.
Akanksha Rana’s reporting in Bengaluru and Krystal Hu in New York; Editing by Anil D’Silva and Ana Nicolaci da Costa