Electronic Arts Outruns Take-Two in Codemasters Race

by Jason R. Sakurai

Published: December 17th, 2020

electronic arts outruns take two in codemasters race

Electronic Arts said it had reached an agreement to buy Codemasters in a deal worth $1.2 billion, beating rival video games maker Take-Two Interactive Software to the finish line for the British company.

Codemasters shares surged 18.7 percent to $8.63, above EA’s offer of $8.17 per share. UK-based Codemasters, known for its Formula One, DiRT Off-Road Racing, Fast & Furious high-speed action, and Grid video games, said it considered the new bid to be superior to the $6.56 per share offer from Take-Two. Take-Two said it was considering its position.

Activision Blizzard Inc., Take-Two, and EA have all benefited from a surge in video game sales in the US, due in part to more people spending time indoors due to the pandemic. But could this trend reverse itself next year, as people begin vaccinating against COVID-19?

“Leveraging our technology, platform expertise, and global reach, will allow us to grow our existing franchises and deliver more industry-defining racing experiences,” said Andrew Wilson, EA’s CEO.

EA’s offer represents a 13.1 percent premium over Codemasters closing share price, and it expects completion of the deal in the first quarter of 2021.

“Codemasters is an attractive asset with a lot of the qualities a consolidator looks for. It has a strategic relationship with NetEase, offering a direct route to the lucrative Chinese market,” analysts said. EA, maker of The Sims, Need for Speed, and FIFA, EA expects the deal to grow net bookings and underlying profitability. UBS Investment Bank is the financial adviser to Electronic Arts, while Jefferies acts as Codemaster’s financial adviser.

Codemasters has been making games for over 30 years, a world leader in the development of racing titles, in particular the DiRT series, and as the official games of Formula One. Their passion is racing games, and their expertise in this genre no doubt led to EA’s acquisition of the company.

[Images: Codemasters]

#Codemasters #ElectronicArts #VideoGames #Videogames #VirtualRacing

Jason R. Sakurai

With a father who owned a dealership, I literally grew up in the business. After college, I worked for GM, Nissan and Mazda, writing articles for automotive enthusiast magazines as a side gig. I discovered you could make a living selling ad space at Four Wheeler magazine, before I moved on to selling TV for the National Hot Rod Association. After that, I started Roadhouse, a marketing, advertising and PR firm dedicated to the automotive, outdoor/apparel, and entertainment industries. Through the years, I continued writing, shooting, and editing. It keep things interesting.

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Inside Looking Out on Dec 17, 2020

If EA is ruining every company they touch then they will eventually run out of money. Or I am missing something? As they say (not us) - they (i.e. we) will last until (we) run out of other peoples money.

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- Alcolawl on Dec 18, 2020
  
  Unfortunately it won't pan out this way. They still have a few good franchises, like Battlefield, that will sell millions of copies no matter what. People blindly purchase products like Call of Duty (Yes, I know Activision is the publisher, but I'm making a point) and other titles simply on name alone, no matter how terrible it may be (see Call of Duty: Cold War). EA can float on this alone. This applies to nearly every major franchise they own. Mindshare, nostalgia, even hope keeps gamers coming back for more. If it's one thing I've learned over the years, when it comes to gaming hardware and video games, the demographic that purchases such things has terrible control over their urges to purchase every new release. Just check completed eBay listings for PlayStation 5s.
  
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Arthur Dailey on Dec 18, 2020

I always liked the appearance of these cars and the commercials with Jonathan Pryce. For some reason the J30 reminds me of a Jaguar Mark II. Is it just me, or is there some resemblance/styling cues?

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