Activision Blizzard to Buy Candy Crush for $5.9 Billion

So today, Activision Blizzard, which makes “Call Of Duty”, announced a deal to purchase mobile gaming company King Digital.

But Activision is quite sure of its success as it has experience in maintaining long-running hit franchises like “World of Warcraft” and “Call of Duty” and they are sure that it will help in developing a new hit series. In fact, these invites are so popular that the hit social media game was bought by Activision Blizzard for a whopping $5.9 billion.

King will operate with a few autonomy under the deal, with the current management team all locked in with long-term contracts.

Activision Blizzard adds that the transaction is expected to be completed by spring 2016.

Activision said it sees tremendous potential in the mobile gaming market, predicting it will generate more than $36 billion in revenue by the end of 2015 and grow more than 50 percent by 2019. The merger is reportedly the biggest in gaming since the combination of the Santa Monica, California-based gaming company and Blizzard in a almost $19 billion deal in 2007.

As gamers move from consoles to mobile devices, video game makers are switching from the physical sale of games to digital growth. And even though the company has developed other games such as “Farm Heroes” and “Pet Rescue”, these did not match the success of “Candy Crush”. The company said that the all-cash transaction will be paid for with $3.6 billion it holds in offshore accounts, and the rest would be borrowed. The company counted 474 million monthly active users in the third quarter this year, said CEO Riccardo Zacconi in the joint statement.

The takeover will create one of the world’s biggest entertainment networks, with a combined total of more than a half-billion monthly active users in 196 countries, by Activision’s count.

The game is already plagued with bugs and complaints, where accidental purchases are made with the unconfirmed click of a button and draining user’s wallets, and this new development could cause many more bugs.

During the first 9 months of fiscal 2015 M&A deals in the gaming industry fell 74% and the IPO market for the sector was very quiet. Many of its games run on less sophisticated smartphones, therefore reaching a wider public.

At $18 per share in cash, the candy crush saga maker sells at a 16% premium over its closing price of $15.54 on the New York stock exchange on Monday. Zynga’s revenue is close to $700 million but its market cap cannot go past $2.26 billion.