The video gaming industry is growing at a rapid pace. This growth was significantly accelerated by the pandemic-driven lockdown. However, this growth might subside next year, as people are raring to get back to their work to make up for the lost time.
EA to acquire Codemasters for €984.6M
In a recent development, California-based video game giant, Electronic Arts (EA), has reached an agreement with the Board of Codemasters for the recommended acquisition of Codemasters, the UK-based game developer and publisher, in a $1.2B (approx €984.6M) deal.
Frank Sagnier, Rashid Varachia – the CEO and CFO of Codemasters, respectively – along with the senior executive management team of Codemasters, intend to remain with the company following completion of the acquisition and will continue to lead its business within EA’s organisation.
Electronic Arts believes that the combination of both companies will enable further growth and success for Codemasters and EA’s popular and innovative racing franchises.
The transaction
In this development, Codemasters’ shareholders will receive 604 pence (approx $7.98 or €6.53) in cash for each ordinary share of Codemasters. The acquisition is anticipated to be completed in the first quarter of calendar 2021.
About Codemasters and its deal with Take-Two
Founded by brothers Richard and David Darling in October 1986, Codemasters is a British video game developer and publisher based in Southam, England. Codemasters’ sports and racing franchises include Formula One, DiRT, DiRT Rally, Grid, and Project Cars
In November 2020, Codemasters had announced that it had been approached to be acquired by Take-Two Interactive as a buyoff offer valued at £739.2M (approx €803.4M). Codemasters says its board was ready to approve the deal, pending the required regulatory approvals and Take-Two’s own commitment once those approvals were granted.
In the same month, both Take-Two and Codemasters agreed to a stock and cash deal worth around $994M (approx €813.5M), which was to be completed by early 2021. If this deal went through, Codemasters would have operated within the 2K label under its existing leadership.
However, Take-Two’s party was crashed by EA in December 2020, which offered to buy all outstanding shares at £6.04 (approx €6.56) for an offer valued at about $1.2B (approx €984.6M). EA is set to acquire the company at about 14 per cent higher than Take-Two’s offer.
Andrew Wilson, CEO of Electronic Arts, says, “We believe there is a deeply compelling opportunity in bringing together Codemasters and Electronic Arts to create amazing and innovative new racing games for fans. Our industry is growing, the racing category is growing, and together we will be positioned to lead in a new era of racing entertainment.
“We have admired Codemasters’ creative talent and high-quality games for many years. With the full leverage of EA’s technology, platform expertise, and global reach, this combination will allow us to grow our existing franchises and deliver more industry-defining racing experiences to a global fan base,” he adds.
Strategic partnership
With the development, the combined expertise and talent from both the brands will help innovate further, and meaningfully increase the delivery of content and experiences to a growing, global audience for racing entertainment.
Codemasters claims to have produced high-quality racing games for several years, including the Formula One franchise that continues to deliver a great entertainment for F1’s growing fan base. EA believes it can help accelerate Codemasters’ performance by leveraging EA’s deep expertise in live services operations, game analytics, and technology.
In addition, EA’s central services teams across development technology, art & motion capture, quality verification, compliance, and localisation resources will all be available to Codemasters. Also, EA’s global publishing, marketing, and game development support capabilities will help strengthen Codemasters’ existing capabilities and in expansion to the addressable market for Codemasters’ franchises.
Gerhard Florin, the Chairman of Codemasters, says, “The Board of Codemasters firmly believes the company would benefit from EA’s knowledge, resources, and extensive global scale – both overall and specifically within the racing sector. We feel this union would provide an exciting and prosperous future for Codemasters, allowing our teams to create, launch, and service bigger and better games to an extremely passionate audience.”
About Electronic Arts
According to the company, Electronic Arts is a global leader in digital interactive entertainment. The Company develops and delivers games, content, and online services for Internet-connected consoles, mobile devices, and personal computers.
Headquartered in Redwood City, California, the company posted GAAP net revenue of $5.5B (approx €4.5B) in the fiscal year 2020. EA SPORTS, Ultimate Team, Battlefield, Apex Legends, The Sims, Need for Speed, Titanfall, and Plants vs. Zombies are some of the trademarks of Electronic Arts.
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