On Monday, Grand Theft Auto developer Take-Two Interactive announced that it would be buying gaming company Zynga for $11.04 billion, bringing franchises like Grand Theft Auto, NBA 2K and Civilization together with games like Words With Friends, and Farmville under one roof.

This deal marks one of the largest, most powerful deals in the industry, essentially creating a gaming powerhouse which extends beyond the PC and traditional gaming consoles to smartphone devices. For more information, you can read an investor presentation about the pathway to bridging the gap between console/PC games to mobile.

“We are thrilled to announce our transformative transaction with Zynga, which significantly diversifies our business and establishes our leadership position in mobile, the fastest growing segment of the interactive entertainment industry,” said Strauss Zelnick, Chairman and CEO of Take-Two.

“Combining Zynga’s expertise in mobile and next-generation platforms with Take-Two’s best-in-class capabilities and intellectual property will enable us to further advance our mission to connect the world through games while achieving significant growth and synergies together,” said Frank Gibeau, CEO of Zynga.

Right now, consumers can download and play Grand Theft Auto III, Vice City, and San Andreas on your phone, but are paid applications through the iOS App Store.

Currently, the mobile gaming sector is expected to reach a total market size of $116.4 billion by 2024, according to gaming market data firm Newzoo. As discussions surrounding mobile gaming and the metaverse continue, developers like Take-Two and Zynga have the landscape as their playing field.

Take-Two, best known for its Red Dead Redemption franchise, represents a 64% premium to the last closing price of Zynga shares offered $9.86 per share for the deal, making the total acquisition of Zynga just over $12 billion, which includes the debt.

The developer has $2.7 billion financing from JPMorgan and intends to fund the rest with cash and proceeds of a new debt issuance.

“It’s a bombshell deal … Zynga was on the list of potential M&A transactions for a long time in the video game business,” said Serkan Toto, CEO of videogame consulting firm Kantan Games in an interview with Reuters.

The deal is expected to conclude in Q1 2023, which ends on June 30, 2022.

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