Electronic Arts decides to buy Glu Mobile for $2.4 billion

Bolstering its mobile platform with the addition of games like Design Home, Covet Fashion and MLB Tap Sports Baseball, San Francisco-based Electronic Arts Inc (EA) has decided to buy Glu Mobile Inc for $2.4 billion. While J.P. Morgan advised EA on the deal, Goldman Sachs, Morgan Stanley and UBS Securities were advisors to Glu.

The U.S. video game developer has offered $12.50 in cash for each Glu share, a premium of about 33 per cent to its closing price as on Monday. The stock of EA was up 1.4 per cent  in extended trading while shares of Glu grew 34 per cent. The deal, which is expected to close in the quarter ending June 30, gives Glu an enterprise value of $2.1 billion.

Here, it may be recollected that Glu had received multiple takeover offers as its stock has underperformed those of its gaming peers.

EA, known for its sports gaming franchise, expects to expand its mobile gaming titles through the acquisition and attract more female gamers through the casual game portfolio Glu owns, including Kim Kardashian: Hollywood.

The game developer has been on a buying spree as it sits on a strong balance sheet and looks to scale with more gaming titles. In December last, it had acquired UK-based Codemasters for $1.2 billion.

Videogame sales in the United States hit a record $56.9 billion last year, according to research firm NPD, as demand for virtual entertainment soared after major public events were canceled to stem the spread of the novel Coronavirus. On the other handf the revenue of San Francisco-based Global grew by 13.3 per cent last year, faster than PC and console gaming, a data from analytics firm Newzoo showed.

Earlier this month, EA raised its annual sales outlook, betting on strong sales of its sports titles including FIFA 21 and Madden NFL 21.