Gaming giant Activision Blizzard late Monday announced an agreement to purchase all outstanding shares of Candy Crush Saga developer King Digital Entertainment in a deal worth $5.9 billion.
Announced by both Activision and King Digital on their respective websites, the huge commitment represents a daring move for the established console game maker. Until now, Activision has only dabbled in the mobile space, focusing most of its attention on AAA titles including "Call of Duty," the world's biggest console franchise.
Activision will pay $18 per share as part of the agreement, much less than the $22.50 per share King was trading at when it went public last year. The stock struggled on concerns that King has been largely unable to replicate the success of Candy Crush Saga, an all-time top-grossing freemium app that took mobile and Internet platforms by storm in 2012.
In-app Candy Crush payments drove $1.4 billion in revenue for fiscal 2014 and while users are still conducting micro-transactions, income is on the decline at $206 million for the quarter ending in June. King's Candy Crush Soda follow-up also ranks as a top-five app, but revenues are nowhere near its predecessor. In the most recent quarter, King's profits dropped 28 percent year over year.
It remains unclear how Activision plans to leverage King's IP, though representatives from both companies were expectedly upbeat on the takeover.
The transaction is expected to be completed by Spring 2016, pending approval of King's shareholders and the Irish High Court.