Activision Blizzard Buys King Digital for $5.9B

The combined company will have more than half a billion monthly active users, says Activision Blizzard CEO Robert Kotick.
Katie Kuehner-HebertNovember 3, 2015
Activision Blizzard Buys King Digital for $5.9B

Activision Blizzard, publisher of popular video games Call of Duty and Destiny, is buying Candy Crush Saga-maker King Digital for $5.9 billion.

The two companies entered an agreement under which Santa Monica, Calif.-based Activision Blizzard would acquire all outstanding King Digital shares for $18 in cash per share, a 20% premium to King Digital’s Oct. 30 closing share price. The board’s of both companies unanimously approved the deal.

The cash consideration payable by Activision Blizzard will be funded from about $3.6 billion of offshore cash on the balance sheet of the Activision Blizzard Group and by a $2.3 billion incremental term loan committed by Bank of America Merrill Lynch and Goldman Sachs, under Activision Blizzard’s existing credit agreement.

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“The combined revenues and profits solidify our position as the largest, most profitable standalone company in interactive entertainment,” Activision Blizzard CEO Robert Kotick said in a press release. “With a combined global network of more than half a billion monthly active users, our potential to reach audiences around the world on the device of their choosing enables us to deliver great games to even bigger audiences than ever before.”

During the last twelve months ended September 30, Activision Blizzard had GAAP revenues of $4.9 billion and King had IFRS revenues of $2.1 billion. During the same period, Activision Blizzard had GAAP net income of $1.1 billion and King had IFRS profit of $0.6 billion.

London-based King Digital surged in value in the past two years off of the strength of Candy Crush Saga, which has been one of mobile’s hottest games. “[King Digital] built an incredible business,” Activision Blizzard’s Kotick told USA Today. “When we think about people who create compelling content and satisfy large audiences, they’ve been brilliant at it. We thought it would make a great opportunity for us to enter a new market with an incredibly talented management team.”

King will continue to be led by Chief Executive Officer Riccardo Zacconi, Chief Creative Officer Sebastian Knutsson, and Chief Operating Officer Stephane Kurgan, the companies said in a press release.

Because King Digital is based in Ireland, the acquisition is subject to approval by the Irish High Court. The deal is expected to be completed by spring 2016.