Electronic Arts to buy Glu Mobile for $2.4 billion in mobile gaming push




By Akanksha Rana and Krystal Hu


(Reuters) – Inc said on Monday it would 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 U.S. video game developer has offered $12.50 in cash for each Glu share, a premium of about 33% to its closing price on Monday. (EA) stock was up 1.4% in extended trading, while Glu shares surged 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 multiple takeover offers last year as its stock has underperformed those of its gaming peers, a source familiar with the situation said.


EA, known for its sports gaming franchise, expects to expand its mobile gaming titles through the acquisition and attract more female gamers through the casual game portfolio Glu owns, including “Kim Kardashian: Hollywood”.


EA has been on a buying spree as it sits on a strong balance sheet and looks to scale with more gaming titles. In December, it acquired UK-based Codemasters for $1.2 billion. [nL4N2IU1P1]


Videogame sales in the United States hit a record $56.9 billion last year, according to research firm NPD, as demand for virtual entertainment soared after major public events were canceled to stem the spread of the novel coronavirus.


Global gaming revenue has grown by 13.3% last year, faster than PC and console gaming, data from analytics firm Newzoo showed.


The gaming industry has seen a series of consolidations in the past few months, including Microsoft’s $7.5 billion acquisition of ZeniMax Media and Swedish video game group Embracer buying 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”.


J.P. Morgan advised EA on the deal, while Goldman Sachs, Morgan Stanley and UBS Securities were advisors to Glu.


 


(Reporting by Akanksha Rana in Bengaluru and Krystal Hu in New York; Editing by Anil D’Silva and Ana Nicolaci da Costa)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor





Source link