EA to Buy U.K. Gaming Company Codemasters for $1.2B

The Codemasters board of directors chose the EA deal over an earlier offer from Take-Two Interactive.
Lauren MuskettDecember 14, 2020

Electronic Arts has reached a deal to buy the U.K. videogame developer Codemasters in a deal worth $1.2 billion. The company is best known for its F1 and Dirt racing game franchises.

“Our industry is growing, the racing category is growing, and together we will be positioned to lead in a new era of racing entertainment,” EA chief executive officer Andrew Wilson said.

The deal topped a previous announcement that the company would be bought by Take-Two Interactive, which agreed to acquire Codemasters for £726 million ($971 million) last month.

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“The Codemasters board has considered various aspects of the EA Offer and considers the EA Offer to represent a superior offer for Codemasters’ shareholders as compared with the Take-Two Offer,” Codemasters said in a statement.

On November 10, Take-Two Interactive Software announced it had reached an agreement to buy Codemasters for cash and Take-Two common stock. The EA offer represents a 14% premium to the offer by Take-Two.

“In some respects, EA’s move feels defensive, because they are already under attack from Take-Two and many of their franchises are becoming second-rate relative to leaders,” Neil Campling, the head of tech, media and telecom research at Mirabaud Securities, said in a note.

Campling said a counteroffer by Take-Two was possible given the “strategic value” of Codemasters intellectual property.

“Take-Two is considering its position in relation to Codemasters and a further announcement will be made when appropriate,” Take-Two said Monday.

Ampere Analysis analyst Louise Shorthouse said Codemasters’ games would likely launch on EA’s subscription service and be brought to a wider audience.

Shares of Codemasters were up more than 20% in London following the news.