Activision Agrees To Buy King Digital

   (FROM THE WALL STREET JOURNAL 11/3/15) 
   By Sarah E. Needleman

Activision Blizzard Inc. late Monday said it is acquiring King Digital Entertainment PLC for $3.4 billion in cash plus debt, combining two giants in the videogame industry.

Activision said it is paying $18 a share, a 20% premium to King's 4 p.m. ET price of $14.96 on the New York Stock Exchange on Oct. 30. On Monday, King shares rose 3.9% to $15.54. Activision said the deal has a total equity value of $5.9 billion.

The deal gives Activision, a powerhouse in console videogames with franchises such as "Call of Duty" and "World of Warcraft," a beachhead in the fast-growing business of smartphone gaming. King shot to fame in 2012 with its hit "Candy Crush Saga," helping to position casual and inexpensive mobile apps as a viable alternative to console and personal-computer games.

Activision said the deal, which is taking place through a subsidiary ABS Partners C.V., will be accretive to 2016 adjusted revenue and per-share earnings by about 30%. The companies will have a combined active monthly user base of nearly 550 million, Activision said.

Activision Blizzard has more than 7,500 employees world-wide and is based in Santa Monica, Calif.

King, which is based in the United Kingdom and has 1,600 employees, will continue to operate as an independent unit under Chief Executive Riccardo Zacconi, Activision said in its prepared statement.

"We are largely using cash on the balance sheet," Activision Chief Executive Bobby Kotick said in an interview. He said that the deal, which has its origins in a meeting between the companies three years ago, is Activision's second largest after Blizzard Entertainment.

Mr. Zacconi, in the interview, said the deal acquisition represents an opportunity to extend its user base beyond its stronghold of women and casual gamers.

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(END) Dow Jones Newswires

November 03, 2015 02:47 ET (07:47 GMT)

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