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(Reuters) – Electronic Arts Inc announced Monday that it will buy Glu Mobile Inc for $ 2.4 billion, bolstering 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 Glu share, a premium of around 33% over its closing price on Monday. Shares of Electronic Arts (EA) rose 1.4% in extended trading, while shares of Glu jumped 34%.
The deal, which is expected to close in the quarter ending June 30, gives Glu an enterprise value of $ 2.1 billion.
San Francisco-based Glu received several buyout offers last year as its stock underperformed its gaming peers, a source familiar with the situation said.
EA, known for its sports game franchise, plans to expand its mobile game titles through acquisition and attract more female gamers through the portfolio of casual games Glu owns, including “Kim Kardashian: Hollywood”.
EA has been on a buying frenzy as it is built on a strong balance sheet and looks to evolve with more game titles. In December, it acquired UK-based Codemasters for $ 1.2 billion. [nL4N2IU1P1]
Video game sales in the United States hit 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 both PC and console games, according to data from analytics firm Newzoo.
The gaming industry has seen a series of consolidations in recent months, including Microsoft’s $ 7.5 billion acquisition of ZeniMax Media and Swedish video game group Embracer which bought Gearbox and Easybrain.
Earlier this month, EA raised its annual sales outlook, betting on strong sales of its sports titles including “FIFA 21” and “Madden NFL 21”.
JP Morgan advised EA on the transaction, while Goldman Sachs, Morgan Stanley and UBS Securities were advisers to Glu.
Reporting by Akanksha Rana in Bengaluru and Krystal Hu in New York; Editing by Anil D’Silva and Ana Nicolaci da Costa
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