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The deal comes as Take-Two plans more smart phone versions of its games, which also include Red Dead Redemption and NBA2K.

“We are thrilled to announce our transformative transaction with Zynga, which significantly diversifies our business and establishes our leadership position in mobile, the fastest growing segment of the interactive entertainment industry,” Take-Two Chief Executive Strauss Zelnick said in a statement.

The transaction prices Zynga at $9.86 per share, a 64 per cent premium on the Friday’s share price.

About one-third of the payment will be in cash and the rest in Take-Two shares.

Zelnick is set to lead the combined company, with Zynga’s team led by Chief Executive Frank Gibeau and Bernard Kim, president of publishing, overseeing the combined company’s mobile gaming efforts.

New York-based Take-Two had revenues of $3.4 billion at the end of its last fiscal year and just shy of 5,100 employees. San Francisco-based Zynga had revenues of $2.0 billion and about 3,000 employees.

Zynga shares soared nearly 50 per cent on the Nasdaq in electronic trading before the opening bell on Wall Street, while shares of Take-Two fell by 10.5 per cent.

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