Electronic Arts Inc. (EA), the company behind popular games like Star Wars Jedi: Fallen Order, Apex Legends, Fifa 21 and Battlefield V, announced on Tuesday that it has entered into a definitive agreement to acquire fellow gaming studio Glu Mobile Inc. for $2.1 billion in enterprise value. This step by one of the global leaders in interactive entertainment brings EA closer to dominating the gaming world. EA plans to acquire Glu by the second quarter of 2020.
According to the terms of the agreement, Glu stockholders will receive $12.50 in cash for each share of Glu stock, representing a 36% premium to Glu’s closing share price on 5 February 2021. Upon closing, the acquisition will be immediately accretive to EA’s total net bookings, and is expected to grow underlying profitability beginning in its first year. If you have some Glu stock, better buckle up.
“Our acquisition of Glu combines amazing teams and deeply-engaging products to create a mobile games leader with proven expertise across many fast-growing genres. Mobile continues to grow as the biggest gaming platform in the world, and with the addition of Glu’s games and talent, we’re doubling the size of our mobile business. With a deep IP portfolio and an expanding global audience, we’ll deliver more exciting experiences for our players and drive further growth for Electronic Arts,” said EA CEO Andrew Wilson.
This acquisition benefits both the organizations – their combined expertise unlocks the potential for further success. The combination of Glu’s experience in building sports and casual mobile games and EA’ industry-leading IP in sports and beyond, will accelerate the creation of exciting new experiences for broad audiences. The combination is expected to witness a strong, recurring stream of revenue across a leading portfolio of live services, strength in key mobile genres, a deep roster of owned and licensed IP, access to a large-scale and growing player network, and ability to reach into new regions and markets.
The acquisition of Glu is the second for EA in 2021 – it had acquired British game developer and publisher Codemasters earlier. The combination of EA and Glu will create a brand-new mobile product portfolio that includes more than 15 top live services across fast-growing genres with a combined $1.32 billion in bookings over the last year.
Glu made headlines when it launched a Kim Kardashian Hollywood game, which was slated to be immensely popular. It has also released several titles, including Tap Sports Baseball, Dine Dash Adventures, and Disney Sorcerers Arena.
Nick Earl, the Glu CEO, said that the agreement with EA was the culmination of the effort of the team to deliver world-class interactive experiences for gamers worldwide, while simultaneously driving the business momentum to continue to yield strong financial and operational results.
He said, “It represents a terrific outcome for all of our stockholders and other key constituents. As part of Electronic Arts, we will continue capitalizing on the opportunities ahead in the expanding mobile gaming industry.” Earl added that they would continue to seize and capitalize on the opportunities in the future in the mobile gaming industry.
The combined strength of EA and Glu would use EA’s network of 430 million players (including more than 100 million active players on mobile) as a foundation to expand its operations and have a demographically diverse audience, with opportunities to expand its franchises and markets.
