Take-Two Interactive Software, Inc. to Combine with Zynga, Inc.

The communication announces a proposed business combination in which Take‑Two Interactive Software, Inc. will acquire Zynga, Inc. for an enterprise value of approximately $12.7 billion, paying $3.50 in cash and 6.36 shares of Take‑Two common stock per Zynga share, representing a 64 % premium to Zynga’s closing price on January 7, 2022. The transaction is structured as a cash‑and‑stock deal and is expected to close in the first quarter of fiscal year 2023, subject to shareholder approval and customary closing conditions. Take‑Two has secured $2.7 billion in debt financing to fund the cash portion and will retain a strong balance sheet with significant liquidity.

The combined entity aims to create one of the largest interactive entertainment portfolios, blending Take‑Two’s console and PC franchises such as Grand Theft Auto and Red Dead Rebellion with Zynga’s leading mobile free‑to‑play titles, including CSR Racing, Merge Dragons and Harry Potter: Puzzles & Spells. Management projects net‑booking growth of 2.6 % to 2.8 % annually through FY24, with cost synergies of roughly $6.1 billion and a three‑year compound annual growth rate of 14 % for the combined net bookings. The merger is expected to diversify revenue streams, enhance cross‑platform monetization, and leverage Zynga’s mobile advertising platform and player database to accelerate user acquisition.

Key financial highlights include Take‑Two’s FY21 net bookings of $2.929 billion and Zynga’s $2.270 billion, with combined FY23 net bookings projected to exceed $6 billion. Adjusted unrestricted operating cash flow is expected to rise from $1.2 billion in FY21 to $1.5 billion by FY24, reflecting the combined company’s improved cash generation capacity. The announcement also outlines governance changes: Take‑Two will expand its board to ten members, adding two Zynga directors. Overall, the combination seeks to deliver scale, diversified intellectual property, and enhanced profitability in a rapidly growing mobile gaming market.