FarmVille maker Zynga being bought by Take-Two at $12.7 billion

Take-Two stated Monday that it was buying Zynga for $12.7 billion in cash-and-stock, plus debt. Zynga will be valued at $9.86 per Share.

Shares Zynga (ZNGA)In late afternoon trading, the news saw a more than 40% increase in shares. Take-Two (TTWO)The drop was almost 15%

Take-Two gains a stronger presence in mobile gaming’s lucrative market. This deal will allow Take-Two to expand its business beyond the PC and console games it is best known for such as NBA 2K and Red Dead Redemption.

Strauss Zelnick (Take-Two’s CEO and chairman) said in a statement, “We are thrilled that we announce our transformative transaction avec Zynga”,

Zynga’s takeover means that the company has a more financially secure parent in the gaming industry, which can help the company grow.

Zynga went public at $10 per share in 2011, but shares have remained stagnant since. That’s partly due to the fickle nature of the mobile gaming business — a decade later, it’s RobloxThis is all the rage.
It’s also because Facebook (FB)Zynga (now called Meta Platforms) inked a new business agreement in 2012 that decreased Zynga’s dependence upon Facebook for its revenue. This was a bad deal for Zynga.

Zynga is hopeful that the merger of Take-Two and Zynga will result in more growth opportunities.

Frank Gibeau, Zynga CEO, stated that “Combining Zynga’s expertise in mobile platforms and next-generation platforms and Take-Two’s best-in-class capabilities as well as intellectual property will allow us to further advance and achieve significant growth.”

The combination Zynga/Take-Two should allow them to compete better with Roblox, whose stock is up nearly 80% since Roblox listed its shares on the New York Stock Exchange last summer.
Take-Two is also in competition with Electronic Arts (EA) Activision Blizzard (ATVI)There are many games on the market that appeal to the masses. Nintendo (NTDOF) Switch, Microsoft (MSFT)Xbox SonyPlayStation consoles