Activision Blizzard have confirmed plans to acquire Candy Crush game company King Digital Entertainment for $ 5.9 billion.
In a press release, Activision Blizzard revealed that the stated price is a premium over King’s worth , and that boards for both companies unanimously agreed to the deal. Since King is based in Dublin, the deal is pending approval from an Irish High Court, based on a scheme of arrangement under Irish law.
The terms of the acquisition reveal that $ 3.6 billion of the purchase will be funded from Activision Blizzard’s own pockets, and $ 2.3 billion via a loan with Bank of America Merrill Lynch and Goldman Sachs Bank USA.
Of course, both companies are giants in gaming, but both have also seen dips in revenue and profit, under the shadow of an increasingly competitive mobile, global gaming market. King reported $ 490 million in revenue this quarter, but this was actually a drop of 18 % compared to the same time last year. On the other hand, Activision Blizzard faced a $ 23 million loss this time last year, but saw an improvement to the tune of $ 127 million in profits this year.
Activision CEO Bobby Kotick’s and King CEO Riccardo Zacconi’s statements seem to indicate the deal is all about the money, and King will continue to enjoy autonomy, perhaps in the same way Blizzard has continued to make games separately from Activision. You can read their statements below:
Bobby Kotick:
The combined revenues and profits solidify our position as the largest, most profitable standalone company in interactive entertainment. With a combined global network of more than half a billion monthly active users, our potential to reach audiences around the world on the device of their choosing enables us to deliver great games to even bigger audiences than ever before.
Riccardo, Sebastian, and Stephane are some of the best minds in the business, and we have long-admired King for consistently creating incredibly fun, deeply engaging free-to-play games that capture the imaginations of players across ages and demographics. Activision Blizzard will provide King with experience, support and investment to continue to build on their tremendous legacy and reach new potential. We share an unwavering commitment to attracting and developing the best talent in the business, and we are excited about what we will be able to accomplish together.
Riccardo Zacconi:
We are excited to be entering into this Acquisition with Activision Blizzard. Since 2003, we have built one of the largest player networks on mobile and Facebook, with 474 million monthly active users in the third quarter 2015, and our talented team has created some of the most successful mobile game franchises. We believe that the Acquisition will position us very well for the next phase of our company's evolution and will bring clear benefits to our players and employees. We will combine our expertise in mobile and free-to-play with Activision Blizzard's world-class brands and proven track record of building and sustaining the most successful franchises, to bring the best games in the world to millions of players worldwide. We are very much looking forward to working with Activision Blizzard. We have two teams that, together, will have an amazing footprint, innovative technology, and leadership across platforms, and unique, established IPs to delight one of the largest networks of players in the world.
