Activision Blizzard, the USA video games firm behind Call of Duty and World of Warcraft, have opened up the coffers to buy King Digital Entertainment, whose titles include Candy Crush, in a deal worth up to $5.9bn (£3.8bn). Also, the deal will benefit the top global console video-game franchise in Call of Duty, and the world’s biggest PC game franchise, World of Warcraft.
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“The combined revenues and profits solidify our position as the largest, most profitable standalone company in interactive entertainment”.
ABS Partners, a unit of Activision, will acquire King shares for US$18 each in cash, representing a 16 per cent premium to King’s closing price on Monday. The acquisition is expected to be completed next spring. Those are strong and consistent numbers, but investors in King have always been disappointed that the company hasn’t delivered another megahit on the level of Candy Crush.
The acquisition significantly raises Santa Monica-based Activision Blizzard’s stature in the fast-growing mobile gaming industry.
The purchase, approved by the boards of directors of both companies, “positions the company for future growth”, it said. King traded at the equivalent of $17.73 as of 11:49 a.m.in Frankfurt on Tuesday.
Although the company has seen great success with their personal computer and console games, they have limited offerings in the mobile gaming market. Still, in its last quarterly earnings report, King reported $490 million in sales and $119 million in profit.
“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, to bring the best games in the world to millions of players worldwide”. Now the company can add Candy Crush, one of the most popular mobile games.
King’s key game, Candy Crush, where users move matching sweets to make lines disappear, launched on Facebook in April 2012 and was released on Apple devices in November that year, followed by an app for Android devices a month later. “He played with his left hand while using his right hand for other tasks, stating that ‘playing was a kind of secondary thing, but it was constantly on'”.
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Shares of King Digital Entertainment Plc. are up 15 percent in premarket trading.
