Zynga, Inc. (NASDAQ: ZNGA) is engaged as a mobile gaming and interactive entertainment company, whose strong portfolio of games have been downloaded over four billion times on mobile. Among the company’s top gaming titles include: FarmVille, Words With Friends, CSR Racing, Empires & Puzzles, Golf Rival, and more. Shares of the mobile gaming company are rallying 45% through early trading on Monday, January 10, 2022. Over the past three months, Zynga has seen average daily volume of 20.78 million shares. However, volume of 145.97 million shares or dollar volume of around $1.27 billion, has already exchanged hands through early trading Monday.
Shares of Zynga are gaining after the company announced it has entered into a definitive agreement, where Take-Two Interactive Software, Inc. (NASDAQ: TTWO) will acquire Zynga in a cash and stock transaction valued at $9.86 per share or a total aggregate value of $12.7 billion. Under the terms of the transaction, Zynga shareholders will receive $3.50 in cash and $6.36 in shares of Take-Two Interactive common stock for each Zynga common share held. This transaction valued Zynga at a premium of 64% compared to its closing price on January 7, 2022.
Once the transaction is completed, Take-Two will immediately become one of the largest publishers in the mobile gaming space, which happens to be the fastest growing area of the interactive entertainment industry.
The combined entity estimates $100 million worth of annual cost synergies within the first two years after closing. However, annual net booking opportunities stand to equate to over $500 million.
“Combining Zynga’s expertise in mobile and next-generation platforms with Take-Two’s best-in-class capabilities and intellectual property will enable us to further advance our mission to connect the world through games while achieving significant growth and synergies together,” said Frank Gibeau, CEO of Zynga. “I am proud of our team’s hard work to deliver a strong finish to 2021, with one of the best performances in Zynga’s history. We are incredibly excited to have found a partner in Take-Two that shares our commitment to investing in our players, amplifying our creative culture, and generating more value for stockholders. With this transformative transaction, we begin a new journey which will allow us to create even better games, reach larger audiences and achieve significant growth as a leader in the next era of gaming.”
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