Electronic Arts buys Glu Mobile for $ 2.4 billion in mobile gaming push

(Reuters) – Electronic Arts Inc said Monday it would buy Glu Mobile Inc for $ 2.4 billion, bolstering its mobile platform with the addition of games like “Design Home,” “Covet Fashion,” and “MLB Tap Sports. Baseball”.

The US video game developer has offered $ 12.50 in cash for each Glu share, a premium of about 33% from Monday’s closing price. Electronic Arts (EA) stock rose 1.4% during long-term trading, while Glu stock rose 34%.

The deal, which is expected to close in the quarter ending June 30, gives Glu an enterprise value of $ 2.1 billion.

San Francisco-based Glu received multiple takeover bids last year as its stock underperformed its competitors, a source familiar with the situation said.

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

EA is buying heavily as it is on a strong balance sheet and seems on scale with more game titles. In December, UK-based Codemasters acquired for $ 1.2 billion. [nL4N2IU1P1]

Video game sales in the United States hit a record $ 56.9 billion last year, according to research firm NPD, when demand for virtual entertainment soared after major public events were canceled to stem the spread of the new coronavirus.

Global gaming revenues are up 13.3% last year, faster than PC and console games, data from analytics firm Newzoo showed.

The gaming industry has undergone a series of consolidations in recent months, including Microsoft’s acquisition of ZeniMax Media for $ 7.5 billion and Swedish video game group Embracer which acquired Gearbox and Easybrain.

Earlier this month, EA increased its annual sales prospects by betting on strong sales of its sports titles, including “FIFA 21” and “Madden NFL 21”.

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