‘Candy Crush’ to be bought for $9 billion

Activision Blizzard (AVTI), the largest video-game publisher and the company behind such first-person shooter games as “Call of Duty” and “World of Warcraft”, is trying to better position itself in the fast-growing mobile gaming market. Activision already has the highly successful Call of Duty franchise to its credit, as well as Blizzard hits like World of Warcraft and Diablo III-not to mention the Starcraft franchise.

King will operate with a few autonomy under the deal, with the current management team all locked in with long-term contracts. Although, the close deal will be expected in 2016, the full approval will depend on the remaining 75% votes from the King’s investors that will be conducted at their headquarters in Ireland, according to Financial Times.

BOBBY KOTICK: It’s amusing, I was sitting in the board meeting yesterday and I was playing the game and I realized that I had to pay better attention.

Analyst Peter Warman of the market research firm Newzoo sided with Activision Blizzard and said that the company did not overspend in the deal since King also have other titles that are still in development, Venture Beat reported.

As gamers move from consoles to mobile devices, video game makers are switching from the physical sale of games to digital growth. In the second quarter, the company’s adjusted revenues decreased 17.5% year over year to $490 million while gross bookings were down 13% from the year-ago period.

Yet although the recipe for success is basically the same, King Digital’s evolution was entirely different from Zynga’s.

Activision says it will continue to invest in King Digital’s efforts and that the addition will bolster revenue by 30%.

Activision said it will use $3.6bn of cash stored outside the U.S., and borrow the rest.

Both companies saw their products become instant hits, and marketed the game through the same annoying methods.

“For King, it offers the potential to leverage its mobile and social gaming expertise across Activision’s large games portfolio and reduces its reliance on its own blockbuster games like ‘Candy Crush, ‘” he continued.

King Digital Entertainment is based in Dublin and is founded on 2003 under the leadership of Riccardo Zacconi.

Activision’s CEO Robert Kotick said that the purchase of King was made at a premium to where the company has been trading.

Activision intends to fund the deal with approximately $3.6 billion of offshore cash and the balance through term loans from Bank of America Merrill Lynch and Goldman Sachs Bank USA.