(Reuters) – Electronic Arts Inc. on Monday announced it will buy Glu Mobile Inc. for $ 2.4 billion, which will strengthen 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 cash for each Glu share, a premium of about 33% on its closing price on Monday. Electronic Arts’ (EA) shares rose 1.4% in extended trading, while Glu shares rose 34%.
The deal, which is expected to end in the quarter on June 30, will give Glu a value of $ 2.1 billion.
A Glu-based Glu received multiple takeover bids last year as the stock played less than that of its competitors, a source familiar with the situation said.
EA, known for its sportsbook franchise, expects to expand its mobile gaming titles by acquiring and attracting more female gamers through the informal gaming portfolio Glu owns, including ‘Kim Kardashian: Hollywood’.
EA was buying because he is sitting on a strong balance sheet and looks with more game titles. In December, it acquired Codemasters in the UK for $ 1.2 billion. [nL4N2IU1P1]
According to research firm NPD, video game sales in the United States reached a record $ 56.9 billion last year as demand for virtual entertainment skyrocketed after major public events were canceled to halt the spread of the new coronavirus .
Data from analytics firm Newzoo grew 13.3% last year, faster than computer and console games.
The gambling industry has undergone a series of consolidations over the past few months, including Microsoft’s $ 7.5 billion acquisition of ZeniMax Media and Swedish video game group Embracer, which is buying Gearbox and Easybrain.
Earlier this month, EA increased its annual sales outlook and bet on strong sales of its sporting 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.
Reporting by Akanksha Rana in Bengaluru and Krystal Hu in New York; Edited by Anil D’Silva and Ana Nicolaci da Costa