Take-Two Interactive Purchases Zynga For $12 Billion

Take-Two Interactive, the parent company of teams like Rockstar Games and 2K makes it back into public eye for possibly making one of the largest acquisitions in industry history. The last major report on the firm in recent weeks on the company comes from the discovery of a formal suit sent to Hazelight for It Takes Two – a co-op adventure which shares the name of the entertainment conglomerate.

What draws attention once more to Take-Two Interactive is the new ownership the firm has paid for. In that, the company in a new press release shared its will be acquiring mobile game giant Zynga for more than $12 billion – that’s $5 billion more than Microsoft’s acquisition for Zenimax Media/Bethesda in fall 2020.

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. This strategic combination brings together our best-in-class console and PC franchises, with a market-leading, diversified mobile publishing platform that has a rich history of innovation and creativity.

Zynga also has a highly talented and deeply experienced team, and we look forward to welcoming them into the Take-Two family in the coming months. As we combine our complementary businesses and operate at a much larger scale, we believe that we will deliver significant value to both sets of stockholders, including $100 million of annual cost synergies within the first two years post-closing and at least $500 million of annual Net Bookings opportunities over time.

Strauss Zelnick, Take-Two Interactive CEO

“Combining Zynga’s expertise in mobile and next-generation platforms with Take-Two’s best-in-class capabilities and intellectual property will enable us to further advance our mission to connect the world through games while achieving significant growth and synergies together,” Frank Gibeau, Zynga CEO said in the press release.

“I am proud of our team’s hard work to deliver a strong finish to 2021, with one of the best performances in Zynga’s history. We are incredibly excited to have found a partner in Take-Two that shares our commitment to investing in our players, amplifying our creative culture, and generating more value for stockholders.

Adding, “With this transformative transaction, we begin a new journey which will allow us to create even better games, reach larger audiences and achieve significant growth as a leader in the next era of gaming.” From Video Game Chronicles, the outlet transcribed from an investor call revealing more plans in future acquisitions from Take-Two Interactive.

In terms of your question regarding ongoing acquisitions, that’s still something that will be of interest to us. We will close this transaction with a fortress like balance sheet, with very little net debt. We expect to be in a net cash position within a few years, by fiscal 24 [the business year ending March 31, 2024].

We expect to generate positive cash flow on an ongoing basis as soon as the transaction closes and we expect the transaction to be accretive, so we’ll be in a powerful position to continue to acquire. And our approach to acquisition remains the same, which is we’re looking for great teams, great intellectual property, and accretive transactions. This transaction, for example, is expected to be accretive upon its closing.

In terms of details referring to what its future targets will be for its acquisition playbook has been left out. But, it is understood that Take-Two Interactive is eyeing competitively at the market. Previously, the firm was adamant for developer Codemasters in 2021 before backing away leading to Electronic Arts scooping up the purchase. You can read the full report by heading here.

Are you surprised by the new Zynga acquisition?

Source: Take-Two Interactive