Jan 10, 2022 - Economy

Take-Two Interactive acquiring Zynga for $12.7 billion

Picture of a phone with the Zynga logo

Photo: Jakub Porzycki/NurPhoto via Getty Images

Take-Two Interactive, publisher of games like Grand Theft Auto and NBA 2K, agreed to buy Zynga for $12.7 billion in cash and stock.

Why it matters: This reflects how traditional game publishers are spending big on mobile, where Zynga has had success with both its legacy hits (e.g., Farmville, Words with Friends) and so-called hypercasual games like Hair Challenge.

Details: Take-Two is paying the equivalent of $9.86 per share, a 64% premium over Zynga's closing price on Friday, but below where it traded for most of the period between December 2020 and July 2021. Back in 2013, former Zynga director John Doerr joked on stage that "God intended" Zynga's share price should be above $10.

The bottom line: Zynga has been in acquisition mode itself, spending more than $750 million in 2021 on companies like StarLark, a mobile developer with a huge golf game, and mobile ad provider Chartboost. Those companies now become part of Take-Two.

Go deeper