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Electronic Arts to buy mobile game developer Glu Mobile for $2.1bn

10 February 2021
2275
2 min.
3
Electronic Arts to buy mobile game developer Glu Mobile for $2.1bn

Buying Glu Mobile

Electronic Arts announced a deal on Monday to acquire major mobile game developer Glu Mobile. As a result of the deal, Electronic Arts' mobile games business will double and the company expects to increase annual sales by more than $500 million. The deal has been approved by market analysts and is due to be completed by June 30.

Shares in Electronic Arts (EA), up 30.6% over the past year, rose nearly 1% after announcing the purchase of Glu Mobile (GLUU).

Shares in Glu Mobile, up 28.3% over the past year, posted a sharper 33% rise after the close of trading on the news.

The acquisition deal, which will combine EA, one of the world's leading video game companies, with a major mobile game developer, seems logical given the growth of both companies amid the COVID-19 pandemic. The digital gaming sector as a whole has shown strong growth over the past year as people sought out online entertainment amid indoor entertainment venues, bars and cinemas.

The deal to buy Electronic Arts Glu Mobile will cost $2.1bn in cash, with Glu shareholders receiving $12.50 for each Glu share, representing a 36% premium to the closing price on 5 February 2021.

In its press release, Electronic Arts said: "the transaction will immediately add significant scale to our mobile gaming business of 430 million players, including more than 100 million active players per month on mobile devices and expand it to new audiences and demographics around the world".

San Francisco-based growing for-profit company Glu Mobile is known for mobile games such as Kim Kardashian Hollywood, Design Home, Covet Fashion and MLB Tap Sports Baseball.

Once approved by GluMobile's shareholders, the deal must also receive approval from the relevant regulators. Electronic Arts expects the purchase to be completed in the quarter ending June 30.

On Monday, Glu Mobile reported its fourth quarter results: revenues were up 25% (year-on-year) to $141 million, year-to-date revenues were up 31% to $540.5 million and annual net income more than doubled to $20.4 million.

Electronic Arts had annual revenues of $5.67 billion, with free annual cash flow of about $1.9 billion allowing the company to make large acquisitions.

Persons1 and Companies2 in the news

Singer
1 place
Glu Mobile
1 place
Electronic Arts
2 place
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