Take-Two is buying Zynga: ‘it’s a transformative opportunity for us’

by
0 comment

Shares of Zynga Inc (NASDAQ: ZNGA) are up more than 40% on Monday after Take-Two Interactive Software Inc (NASDAQ: TTWO) said it will buy the mobile gaming company for $12.70 billion in cash and stock.

Take-Two CEO explains the rationale for the accquisition

According to Strauss Zelnick – the chief executive of Take-Two Interactive – the acquisition offers a fantastic opportunity for the company to expand its footprint in mobile gaming. On CNBC’s “Squawk on the Street”, he said:

This is a transformative opportunity for us. This will position Take-Two as one of the largest publicly traded interactive entertainment companies in the world with over 50% of our net bookings coming from the fastest-growing segment in the business; mobile and free to play.

Take-Two Interactive has identified at least $500 million in annual synergies. Even excluding that, Zelnick added, the joint company will note a 14% annual growth in its revenue through fiscal 2024. The announcement comes roughly two months after Zynga launched FarmVille 3.  

Zelnick is not fazed by the intraday price action

Take-Two Interactive is down more than 15% in the stock market this morning, but Zelnick says value creation over longer periods of time is what matters most. He added:

We’re building this company for the long-term. That’s always been our approach. We’ve never paid much attention to intraday trading markets. We focus on creating value for our players, colleagues, and shareholders. It’s worked for us and will work out here as well.

The transaction that values Zynga at $9.86 a share is expected to complete by June 30th, subject to customary closing conditions. The owner of GTA franchise will pay $3.50 to Zynga shareholders in cash and the remaining $6.36 in TTWO.

The post Take-Two is buying Zynga: ‘it’s a transformative opportunity for us’ appeared first on Invezz.

Related Posts