Take-Two to Acquire Zynga for $12.7B

Take-Two Interactive (NASDAQ: TTWO) has agreed to snap up California-based Zynga (NASDAQ: ZNGA) in a cash and stock deal worth about $12.7 billion, representing a 64% premium to Zynga’s closing share price on January 7, 2022. 

Through this acquisition, Take-Two’s portfolio of console and PC games, and Zynga’s mobile franchises, will be combined to establish Take-Two as one of the largest publishers of mobile games, the fastest-growing segment of the interactive entertainment industry, with $6.1 billion in trailing twelve-month pro-forma Net Bookings for the period ended September 30, 2021.

The deal is expected to deliver around $100 million of annual cost synergies within the first two years post-closing and over $500 million of annual Net Bookings opportunities over time. 

Per the terms of the deal, shareholders of Zynga will receive $6.36 in shares of Take-Two common stock and $3.50 in cash for each share held. The transaction, which awaits both companies’ shareholder approvals and certain regulatory approvals, is likely to close in the first quarter of Take-Two’s Fiscal Year 2023, ending June 30, 2022. 

With Zynga’s stockholders receiving around 64.5% of the purchase price in Take-Two stock, all stockholders are likely to gain from the combined company’s scale, improved financial profile, and expected synergies. 

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