EA Games, the largest game producer in the whole world, announced today the purchase of Glu Mobile for the price of 2.4 billion dollars, a huge amount that brings to its portfolio a multitude of very popular titles.
Bucharest, February 10, 2021 - Electronic Arts, a global leader in interactive digital entertainment, and Glu Mobile, a global developer and distributor of video games for mobile phones, including Design Home, Covet Fashion and MLB Tap Sports Baseball, have entered into a definitive agreement under which Electronic Arts will take over Glu Mobile. Under the terms of the agreement, EA will acquire Glu for $2,1 billion, representing the company's market value. Glu shareholders will receive $12,50 in cash per share, up 36% from the trading price of Glu stock on February 5, 2021. After the transaction closes, its value will add to Electronic Arts' total net assets and profitability is expected to increase from the first year.
The acquisition is an important step for Electronic Arts' mobile game development division. The partnership between Electronic Arts and Glu creates a leading mobile product portfolio that includes more than 15 live services in growing categories, totaling $1,32 billion in contracted revenue over the past twelve months. By bringing together Glu and Electronic Arts' best-in-class mobile game development teams with a collective portfolio of sports, lifestyle, RPG, casual and other titles, and leveraging Electronic Arts' marketing and distribution power to to generate global reach, the two companies will grow EA's network of 430 million players by more than 100 million monthly active players on mobile phones and expand to new potential players around the world.
"The acquisition of Glu brings together great teams and products and creates a new leader in the mobile gaming segment with proven expertise in multiple high-growth game categories. Mobile continues to grow and become the largest video game platform in the world, and by integrating games and the Glu team we are doubling the size of our business in this segment. We rely on a broad portfolio and a growing global audience to provide our players with ever more exciting experiences and continue to grow Electronic Arts,” said Andrew Wilson, CEO of Electronic Arts.
"This transaction crowns the tremendous work the Glu team has done to deliver world-class interactive experiences to our players while developing the business to excellent financial and operational results. It is a wonderful result for all our shareholders and partners. As part of Electronic Arts, we will continue to capitalize on the opportunities this growing mobile game industry presents us," said Nick Earl, CEO of Glu.
The strategic reasons that led to this acquisition include:
- Creating a successful portfolio of games for mobile phones – The complementarity of the successful products of Electronic Arts and Glu will lead to the creation of a portfolio that covers many of the most popular game genres for this platform, including sports, RPG, lifestyle, casual and mid-core. The new structure will have a demographically diverse audience with significant opportunities for franchise and market expansion.
- Extending live services – Both Electronic Arts and Glu have proven successful in creating live mobile games that engage large communities over many years and provide significant recurring revenue. The experience that the two companies have in this area has a high potential for further success. Glu franchises such as Design Home, Covet Fashion and MLB Tap Sports Baseball, will benefit from Electronic Arts' global licensing and distribution capacity to open them up to new markets and more players. Glu's expertise in building and monetizing sports and casual games on mobile phones, along with Electronic Arts' recognition in the sports segment and beyond, will accelerate the creation of new immersive experiences for audiences.
- Creative and experienced leadership and team capacity building – Glu brings a talented team of more than 500 mobile game developers (and nearly 800 employees in total), adding a significant proportion to the platform-focused Electronic Arts division. Glu's creative leaders are renowned in Electronic Arts and share a common goal of creating highly successful, long-lasting games for mobile phones. The industry-leading positioning, talented teams, experience in game development and long-running franchises, and the technology available to the two companies will be a catalyst for delivering new experiences and growth.
- Accelerated growth – The partnership between Electronic Arts and Glu will be a development engine for the mobile gaming platform. With sustained revenue from the live services portfolio, expertise in developing key mobile game categories, numerous titles, access to a large and growing player network, and the ability to reach new regions and markets, the acquisition will quickly add to Electronic Arts' total net assets, and profitability is expected to increase starting in the first year.
Details of the proposed transaction
The boards of directors of Electronic Arts and Glu Mobile have approved the transaction, and Glu's board of directors is recommending that Glu stockholders approve the transaction and adopt the merger agreement. Under the terms of the deal, Glu shareholders will receive $12,50 in cash for each Glu share, representing an equity value of $2,4 billion and a total company value of $2,1 billion, including Glu cash , in a net worth of 364 million dollars. The transaction is expected to close in the quarter ending June 30, 2021, subject to approval by Glu shareholders, receipt of necessary regulatory approvals and other customary transaction conditions.
