Electronic Arts, Inc. (NASDAQ:EA) has moved to strengthen its pipeline of big titles in the gaming business with Codemasters’ acquisition. The company has reached an agreement to acquire the U.K racing game developer for $1.2 billion. The deal upstages Take-Two Interactive proposed a $971 million takeover bid.
Under the terms of the deal, Codemasters shareholders are to receive £6.04 for each ordinary share of Codemasters held. The deal should close in the first quarter of 2021. Once complete, it would become Electronics Art’s biggest deal in history.
With the acquisition, Electronics Art gains access to Codemasters popular franchises led by Formula One and Dirt racing game. The merger should bring the big titles under the popular Need for Speed racing game. Likewise, the acquisition underscores EA’s ambitions to position itself as the leading publisher in racing games.
According to Codemasters Chairman, Gerhard Florin, the merger guarantees a prosperous future for Codemasters shareholders. The two teams should be able to create and launch much bigger and better games for the passionate audience.
Electronics Art CEO Andrew Wilson expects the acquisition to allow the parent company to grow existing franchises and deliver more industry defining racing experiences. The merger should also allow the teams to innovate further and increase the delivery of content and experiences to the growing global audience.
Video Game Consolidation
The $1.2 billion deal comes at a time of growing consolidation in the gaming business. Big video game companies are increasingly acquiring small companies in a bid to gain access to big gaming titles with tremendous potential.
Microsoft Corporation (NASDAQ:MSFT) has already confirmed plans to acquire ZeniMax Media. The software giant has inked a $7.5 billion deal to strengthen its gaming business. The acquisition is the tech giant’s biggest acquisition in the gaming industry.
Similarly, the COVID-19 pandemic has accelerated the consolidation spree in the aftermath of video game consumption inching higher. With people forced to stay at home as part of social distancing policies put in place to curb the spread of the deadly virus, playing video games has emerged as a preferred means of entertainment and socializing.