Take-Two Interactive to buy FarmVille creator Zynga for $12.7 billion

The sign on the headquarters of Zynga is in San Francisco, California. The company is expected to report earnings on August 5.

Take-Two Interactive is buying mobile gaming company Zynga for $12.7 billion, marking the latest blockbuster acquisition in a string of major deals in the video game industry.

The company announced Monday that it would acquire all of the outstanding shares of the company for $9.86 a share. In the US, shares of the social networking company skyrocketed.

Take-Two's CEO said in a press release that the strategic combination brings together their best-in-class console and PC franchises with a market-leading, diversified mobile publishing platform.

At one point, the most successful app developer on the platform was Zynga, best known for its FarmVille series of mobile gaming titles.

In the years since, the company has turned its focus to mobile, hoping to take advantage of the growth in the smartphone era.

While the company was seen as a beneficiary of stay-at- home trends brought about by Covid-19, its share price has fallen in the past year, with some investors questioning whether the gaming boom has legs in the long term.

CSR Racing, Empires & Puzzles and Harry Potter: Puzzles & Spells are all games that are based on Warner Bros. films.

The deal is expected to create at least $100 million in annual cost synergies within the first two years after closing, and at least $500 million over time.