Electronic Arts will buy Glu Mobile for $ 2.4 billion in mobile games

(Reuters) – Electronic Arts Inc said on Monday it would buy Glu Mobile Inc for $ 2.4 billion, strengthening its mobile platform by adding games such as “Design Home”, “Covet Fashion” and “MLB Tap Sports Baseball” .

The American video game developer offered $ 12.50 in cash for each Glu share, a premium of about 33% at Monday’s closing price. Shares of Electronic Arts (EA) rose 1.4% in extended transactions, while Glu shares rose 34%.

The deal, which is expected to be completed in the quarter ending June 30, gives Glu a $ 2.1 billion business value.

The San Francisco-based Glu received several takeover bids last year as its shares performed less well than those of its gaming colleagues, a source familiar with the situation said.

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

EA has started buying because it is in a strong balance sheet and seems to be growing with more game titles. In December, it acquired the UK-based Codemasters for $ 1.2 billion. [nL4N2IU1P1]

U.S. video game sales hit a record $ 56.9 billion last year, according to research firm NPD, as demand for virtual entertainment rose after major public events were canceled to stop the spread of the new coronavirus.

Global gaming revenue grew 13.3% last year, faster than PC and console games, data from analyst firm Newzoo said.

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

Earlier this month, EA raised its annual sales outlook, relying on strong sales of its sports titles, including “FIFA 21” and “Madden NFL 21”.

JP Morgan advised EA on the transaction, while Goldman Sachs, Morgan Stanley and UBS Securities were advisers to Glu.