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UPDATE 2- Electronic Arts to buy Glu Mobile for $2.4 billion in mobile gaming push

Akanksha Rana and Krystal Hu
·2 min read
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(Adds background and advisors)

By Akanksha Rana and Krystal Hu

Feb 8 (Reuters) - Electronic Arts Inc said on Mondayit would buy Glu Mobile Inc for $2.4 billion,bolstering its mobile platform with the addition of games suchas "Design Home", "Covet Fashion", and "MLB Tap SportsBaseball".

The U.S. video game developer has offered $12.50 in cash foreach Glu share, a premium of about 33% to its closing price onMonday. Electronic Arts (EA) stock was up 1.4% in extendedtrading, while Glu shares surged 34%.

The deal, which is expected to close in the quarter endingJune 30, gives Glu an enterprise value of $2.1 billion.

San Francisco-based Glu received multiple takeover offerslast year as its stock has underperformed those of its gamingpeers, a source familiar with the situation said.

EA, known for its sports gaming franchise, expects to expandits mobile gaming titles through the acquisition and attractmore female gamers through the casual game portfolio Glu owns,including "Kim Kardashian: Hollywood".

EA has been on a buying spree as it sits on a strong balancesheet and looks to scale with more gaming titles. In December,it acquired UK-based Codemasters for $1.2 billion.

Videogame sales in the United States hit a record $56.9billion last year, according to research firm NPD, as demand forvirtual entertainment soared after major public events werecanceled to stem the spread of the novel coronavirus.

Global gaming revenue has grown by 13.3% last year, fasterthan PC and console gaming, data from analytics firm Newzooshowed.

The gaming industry has seen a series of consolidations inthe past few months, including Microsoft's $7.5 billionacquisition of ZeniMax Media and Swedish video game groupEmbracer buying Gearbox and Easybrain.

Earlier this month, EA raised its annual sales outlook,betting on strong sales of its sports titles including "FIFA 21"and "Madden NFL 21".

J.P. Morgan advised EA on the deal, while Goldman Sachs,Morgan Stanley and UBS Securities were advisors to Glu.(Reporting by Akanksha Rana in Bengaluru and Krystal Hu in NewYork; Editing by Anil D'Silva and Ana Nicolaci da Costa)