Video game publisher Take-Two announced it reached a deal to acquire ‘Farmville’ creator Zynga for $12.7 billion, in a major mobile gaming push by the maker of ‘Grand Theft Auto’.

The deal, the largest ever in the sector, will create a gaming powerhouse with a market cap of nearly $30 billion, spanning console, PC and mobile devices at a time when more people are gaming on their smartphones.

New York-based Take-Two, also known for the adventure game ‘Red Dead Redemption, offered $3.50 in cash and $6.361 in shares for each Zynga share, a 64% premium to the last closing price. About one-third of the payment will be in cash and the rest in Take-Two shares.

The acquisition is worth $12.7 billion including debt and is expected to close in the first half of this year. There is also a go-shop period of 45 days, meaning Zynga can negotiate with other buyers for a better offer until February 24. The deal comes as Take-Two plans more smartphone versions of its games, which also include Red Dead Redemption and NBA2K.

Take-Two Chief Executive Strauss Zelnick said in a statement that we are thrilled to announce our transformative transaction with Zynga, which significantly diversifies our business and establishes our leadership position in mobile, the fastest-growing segment of the interactive entertainment industry.

Strauss Zelnick is set to lead the combined company, with Zynga’s team led by Chief Executive Frank Gibeau and Bernard Kim, president of publishing, overseeing the combined company’s mobile gaming efforts.

The latest round of negotiation came late last year as Zynga shed more than a third of its market value, the biggest drop among major game publishers. Zynga has reeled from falling engagement levels and Apple’s move to allow iPhone users to opt-out of being tracked by advertisers.

Take-Two had revenues of $3.4 billion at the end of its last fiscal year and just shy of 5,100 employees. San Francisco-based Zynga had revenues of $2.0 billion and about 3,000 employees. The mobile gaming market is likely to reach a size of $116.4 billion by 2024.

Take-Two expects about $100 million in annual cost savings within the first two years and more than $500 million in net bookings overtime when the deal closes in mid-2022. JP Morgan and LionTree advised Take-Two while Goldman Sachs advised Zynga on the sale.

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