Sega, the Japanese gaming giant, made a massive offer of 706 million euros ($776 million) to acquire Rovio Entertainment Oyj, the creator of the famous puzzle game Angry Birds, on Monday.
The deal is intended to be for the entirety of Rovio’s outstanding shares and options, with the stocks valued at 9.25 euros per share and the options at 1.48 euros.
This pricing represents a 19% premium to the stock’s closing price before the announcement, as confirmed by Sega. The board of Rovio has already expressed its support for the offer.
According to Sega, the games created by Rovio have been downloaded over 5 billion times, and the Angry Birds franchise has been licensed into other entertainment and consumer products.
Sega is a Tokyo-based company that was founded in 1960, and it is best known for its Sonic the Hedgehog and Total War franchises, as well as consoles such as the Sega Genesis/Mega Drive, which were popular outside of Japan in the 1990s.
Sega intends to use Rovio to expand its presence in the mobile gaming market, and it aims to leverage its mobile game development capabilities to boost the development of mobile-based versions of its existing games.
According to The Wall Street Journal, the Rovio deal is expected to be worth around $1 billion, but this has not been confirmed by Sega or Rovio. At the time of the announcement, Rovio’s shares were up 17.88% at 9:00 a.m. London time, while shares of Sega Sammy, the holding company of Sega following its 2004 merger with games maker Sammy, closed 4.2% lower on Monday before the acquisition was announced.
Sega Sammy’s Group CEO, Haruki Satomi, expressed his excitement about the acquisition, stating that “among the rapidly growing global gaming market, the mobile gaming market has especially high potential, and it has been SEGA’s long-term goal to accelerate its expansion in this field.” He added that Angry Birds is loved across the world and expressed confidence that the combination of both companies’ brands, characters, fanbase, as well as corporate culture and functionality, will result in significant synergies in the future.
Alexandre Pelletier-Normand, the CEO of Rovio, also expressed his excitement about the deal, calling Red, the lead character in Angry Birds, and Sonic the Hedgehog “two globally recognized and iconic characters made by two remarkably complementary companies, with a worldwide reach that spans mobile, PC/console, and beyond.” With this acquisition, Sega intends to establish its dominance in the mobile gaming market and enhance its existing intellectual property portfolio.
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