Electronic Arts Inc. (EA), a global leader in interactive entertainment has announced the acquisition of a leading global developer and publisher of mobile games Glu Mobile in a deal worth $2.4 billion. The deal is aimed at EA expanding their mobile games influence, a place where EA has found fickle results.
Glu Mobile was founded in 2001 as Cyent studios. They then renamed themselves to Sorrent later that year, and finally went public in 2007. After that, Tencent became their largest shareholder with a 15% stake which was purchased in 2015. This is the largest move since that purchase by Tencent 6 years ago.
About the Proposed Transaction
As a part of this deal, EA has announced that Glu stockholders will receive a 36% premium to the closing price on February 5th, 2021. This represents an equity value of $2.4 billion and a total enterprise value of $2.1 billion including Glu’s net cash of $364 million. This deal is expected to close in the quarter ending on June 30, 2021. This acquisition will result in a raise of each of Glu’s shareholder’s stock by $12.56 a share.
This will bring popular Glu titles such as Diner Dash, Kim Kardashian Hollywood, and Disney Sorcerer’s Arena under EA’s banner. Glu will now be able to build games based on EA’s intellectual properties. Moreover, they can now take advantage of the marketing and publishing arms of the massive company. EA confirmed that even though they are acquiring Glu, the studio will not stop supporting games already in its portfolio.
We did this deal because we believe mobile is the fastest-growing platform on the planet for video games. The combination of these two companies creates a market leader in lifestyle and sports.
Andrew Wilson, CEO, Electronic Arts (EA)
“As successful as they’ve been, they haven’t had great international reach yet,” he added. “This is an opportunity for us to help them unlock that door.”
EA looks to double the number of gamers in the next 5 years!
EA is a company mostly known for PC and Console video games such as Battlefield, Madden, and FIFA. But also, they have made several popular mobile titles such as Star Wars: Galaxy of Heroes and FIFA Mobile. With this acquisition, EA expressed their intentions to double the number of gamers who are playing their titles, over the course of the next 5 years. EA is a profitable company, but it may surprise you that even though they mostly make PC games, their monetization style is very mobile. It’s clear that EA likes this form of monetization and wants to make more profits in a similar manner through many of such kinds of deals and acquisitions.
What do you think about the decision of EA to acquire Glu Mobile? Do let us know in the comments below.
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