Japanese gaming company Sega has confirmed that it is acquiring Finnish mobile game maker Rovio in an all-cash deal worth $775 million. The news followed failed takeover talks with Israeli mobile game firm Playtika.
Rovio expects the deal to close in Q2 of its fiscal year, subject to “certain customary conditions”. Sega’s offer represents a 63.1% premium on Rovio’s closing price on 19 January, when acquisition rumours first began, and a 19% premium on its final closing price on 14 April.
Founded in 2003, Rovio is known for producing the popular game Angry Birds, which became a global hit and spawned a franchise that includes a TV show, toys, cookbooks and movies. Rovio went public in 2017, listing on the Nasdaq Helsinki with a $1bn valuation. Its shares have declined in value, generally hovering at around half of their IPO price. Rovio started seeking suitors after struggling to maintain its IPO value.
Sega says the acquisition will “accelerate the development” of its existing games and create “synergies” between its own brands and Rovio’s. Sega was particularly drawn to Rovio’s experience in “live service” mobile gaming, which keeps players engaged with regular content updates, and to the Finnish firm’s ability to expand Sega’s current and future games in Europe and North America.
Mobile gaming is a huge and lucrative industry, with the global market expected to generate $165bn in 2020. The sector has seen numerous acquisitions in recent years, including Tencent’s $8.6bn acquisition of Clash of Clans maker Supercell in 2016, Zynga’s $1.8bn purchase of Peak Games in 2020, and Electronic Arts’ $1.4bn acquisition of UK mobile games studio Playdemic this year. Analysts believe the Rovio acquisition will create a strong foothold for Sega in the global mobile gaming market.