In December 2020, Electronic Arts Inc. (EA) managed to win the battle to buy Codemasters, the British producer and publisher of computer games. The $1.2 billion agreement would give the famous genre access to Electronic Arts.
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Take-Two Interactive Applications Inc. (TTWO) attempted to acquire Codemasters last month, but it bid fewer, around $960 million.
Codemasters is listed on the London Stock Exchange and a per-share compensation of 604 pence, or just under $0.80, in the deal would be paid to its stockholders. By trading the stock up to 656 pence or almost $0.87, U.K investors replied to the news, signaling a ringing endorsement of the deal.
The acquisition is costly for Electronic Arts, especially given the fact that Codemasters has a limited specialty in car racing games. EA presumably wants the production to be included in its famous “Need for Speed” franchise. The last game update for this series was in November 2020, but with visual changes, it was a re-release of “Need for Speed: Hot Pursuit Remastered” 2010.
There is already a strong fan base for the car simulator genre, and this style of video game is well adapted for consoles and multiplayer. But the demands of the gamers for graphics and visuals have increased, so enterprises looking to benefit from this genre must search for programming and visualization professionals with sufficient expertise.
Codemasters has well-known “F1” and “Dirt” franchises in addition to specialists. Around the same time, Electronic Arts has ample money to buy: as of September 30, 2020, the cash reserve was over $6 billion, with $552 million in long-term debt. EA is expecting the deal to be close before the end of the first quarter of 2021.
Electronic Arts Inc. (EA) was up +0.96% on Wednesday to end the session at $142.05 with a market capitalization of $41.12 billion.