The top video game publisher in the U.S. is acquiring Candy Crush Saga-maker King Digital for $5.9 billion.
In a deal announced late Monday, Activision Blizzard (ATVI) — publisher of popular video games Call of Duty and Destiny — will acquire all outstanding King shares for $18.00 in cash per share, a 20% premium to King’s (KING) Oct. 30 closing share price.
The deal brings together two of the top five highest-grossing mobile games in the U.S. (Candy Crush Saga and Candy Crush Soda Saga), with the top global console video-game franchise in Call of Duty, and the world’s biggest PC game franchise, World of Warcraft, the companies said.
Shares of King jumped 14% in afternoon trading Tuesday, while Activision shares surged 6.6%.
During the twelve months ending Sept. 30, 2015, the companies had adjusted revenues of $4.7 billion (Activision Blizzard) and $2.1 billion (King).
“They built an incredible business,” said Activision Blizzard CEO Robert Kotick during an interview. “When we think about people who create compelling content and satisfy large audiences, they’ve been brilliant at it. We thought it would make a great opportunity for us to enter a new market.” with an incredibly talented management team.”
King CEO Riccardo Zacconi, along with Chief Creative Officer Sebastian Knutsson, and COO Stephane Kurgan, will continue to run King as an independent operating unit.
“We will combine our expertise in mobile and free-to-play with Activision Blizzard’s world-class brands and proven track record of building and sustaining the most successful franchises,” Zacconi said in a statement.
Both companies boards have unanimously approved the deal and expect it to be completed by spring 2016. However, it must be approved by King’s shareholders and the Irish High Court. Activision chief operating officer Thomas Tippl said during a conference call Tuesday King will operate independently, similar to how Blizzard has operated since the two video game publishers merged in 2008.
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SOURCE: USA Today, Mike Snider and Brett Molina