The video games publisher behind Grand Theft Auto has struck a $13bn (£9.6bn) deal for FarmVille owner Zynga in a huge bet on the future of mobile gaming.
Take-Two has paved the way for smartphone spin-offs of its biggest console hits by creating one of the industry’s largest mobile game publishers with sales of just over $6bn.
The move marries titles from Take-Two’s most popular console and PC series, including GTA, Red Dead Redemption and Civilisation, with Zynga’s mobile games spanning Empires & Puzzles, Golf Rival and Harry Potter: Puzzles & Spells.
The cash-and-shares deal is a 64pc premium of Zynga’s closing price on Friday.
Strauss Zelnick, chief executive of Take-Two, said the deal significantly diversified the company and would give it leadership in one of the fastest-growing gaming arenas.
“This strategic combination brings together our best-in-class console and PC franchises, with a market-leading, diversified mobile publishing platform that has a rich history of innovation and creativity,” he said.
“Zynga also has a highly talented and deeply experienced team, and we look forward to welcoming them into the Take-Two family in the coming months.”
The enlarged company is expected to deliver cost savings of $100m a year and believes there are opportunities to grow annual sales by $500m.
Mobile gaming posted sales of $136bn last year and that figure is expected to rise by a further 8pc over the next three years, according IDG Consulting data cited by Take-Two.
Take-Two owns Rockstar Games, whose Edinburgh-based development studio, Rockstar North, spearheaded the creation of the GTA series and supported the development of RDR and Max Payne 3.
The company also owns 2K Games, which publishes sports games NBA 2K22, WWE 2K Battlegrounds and PGA Tour 2K21.
Frank Gibeau, chief executive of Zynga, said: “With this transformative transaction, we begin a new journey which will allow us to create even better games, reach larger audiences and achieve significant growth as a leader in the next era of gaming.”
It is the latest blockbuster deal in the video game sector, which has experienced a boom in players and sales during lockdown.
Electronic Arts, publisher of the Fifa football series, sealed an £860m takeover of London-listed Codemasters in February, while China’s Tencent bought Sackboy developer Sumo Digital for $1.3bn in July.
A string of publishers and developers have also raced to list in London. The Telegraph revealed that Leaf, Canada’s biggest developer of free-to-play mobile games, was raising C$10m (£6m) through a dual listing in the capital.
Meanwhile, Devolver Digital, the American publisher behind smash hit Fall Guys: Ultimate Knockout, launched a £700m London float at the start of November.