Zynga Shares Surge 40% After Take-Two Announces $12.7 Billion Takeover


Video game company Take-Two Interactive, known for “Grand Theft Auto,” “NBA 2K” and “Red Dead Redemption,” announced Monday that it is buying mobile gaming company Zynga in a blockbuster $12.7 billion deal, one of the industry’s largest acquisitions to date.

Take-Two’s acquisition increases Zynga cofounder Mark Pincus’ net worth by around $150 million in … [+] what will likely be one of the video game industry’s largest deals ever.


Key Facts

Take-Two announced that it would acquire all outstanding shares of Zynga for $9.86 per share in a cash-and-stock deal, a more than 60% premium to Zynga’s closing price last Friday. 

Shares of Zynga skyrocketed 40% on the news, while shares of Take-Two fell nearly 14%. 

Zynga, which was down 35% in 2021, is well-known for its popular mobile games including “Farmville,” “CSR Racing” and “Words With Friends.”

The blockbuster $12.7 billion is a logical move for Take-Two, which is looking to further build on its position in the fast-growing mobile gaming segment where outsize consumer spending is on the rise compared to console and computer games in recent years. 

Zynga cofounder Mark Pincus saw his net worth jump more than $150 million on the news Monday, bringing his overall fortune to around $1.5 billion, according to Forbes’ estimates.

The deal, which will still need to gain regulatory and shareholder approvals, is expected to close by June 30, 2022.

Key Background:

Take-Two’s acquisition of Zynga unites two top gaming companies with cult followings. What’s more, it is the latest of several major deals within the video game industry over the past year, including Microsoft’s $7.5 billion deal for Bethesda parent ZeniMax Media and Electronic Arts’ $2.1 billion deal for Glu Mobile.

What To Watch For:

The combined company would be one of the largest gaming companies overall, with an expected $6.1 billion in sales and nearly $800 million in operating cash flow, according to the press release. Take-Two also said that Zynga will help adapt several of its popular console game franchises for mobile. 

Crucial Quote:

“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,” Take-Two CEO Strauss Zelnick said in a statement. He will remain head of the company once the two companies merge later this year.

Further Reading:

Discovery Shares Jump 17% As Excitement Builds Around WarnerMedia Deal (Forbes)

Rivian Shares Plunge 15% In Two Days After Amazon Signs Deal With Rival (Forbes)

Ford Stock Surges 11% As Company Aims To Challenge Tesla’s Electric Vehicle Dominance (Forbes)