Electronic Arts Set For Buying Glu Mobile For $2.4 Billion In Mobile Gaming Push

CIOReviewIndia Team | Tuesday, 09 February 2021, 09:41 IST

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Electronic Arts Inc on Monday said that it would buy Glu Mobile Inc for US $2.4 billion, bolstering its mobile platform with the addition of games like "Design Home", "Covet Fashion", and "MLB Tap Sports Baseball".

The video game developer has offered US $12.50 in cash for each Glu share, which is premium of about 33 percent of its closing price on Monday. EA stock increased by 1.4 percent in the extended trading and Glu shares surged 34 percent.

The deal is expected to end in the quarter (June 30). It gives Glu an enterprise value of US $2.1 billion.

Glu, which is located in San Francisco, received multiple takeover offers in the previous year as its stock has underperformed those of its gaming peers, which is a source familiar with the situation reported.

EA, known for its sports gaming franchise, expects to expand its mobile gaming titles through the acquisition and attract more female gamers through the casual game portfolio that is owned by Glu. It includes ‘Kim Kardashian: Hollywood’.

EA has been on in a buying spree as it sits on a strong balance sheet and looks forward for scaling with more gaming titles.

In December, EA acquired UK-based Codemasters for US $1.2 billion.

Videogame sales in the United States hit a record margin of US $56.9 billion in 2020, according to the research firm NPD, as demand for the virtual entertainment soard after major public events were cancelled for restricting novel coronavirus outbreak.

Global gaming revenue has went up by 13.3 percent last year, which is faster that PC and console gaming, data from analytics firm Newzoo showed.

The gaming industry has seen a series of consolidations in the preview few months, which include Microsoft’s US $7.5 billion acquisition of ZeniMax Media and Swedish video game group Embracer buying Gearbox and Easybrain.

Earlier this month, EA increase its annual sales outlook, and provisioned bets on strong sales of its sports titles including ‘FIFA 21’ and ‘Madden NFL 21’.

J.P. Morgan advised EA on the deal, while Goldman Sachs, Morgan Stanley and UBS Securities advised Glu.

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