The mobile game developer behind the Angry Birds media franchise has agreed to be purchased by Sega Sammy Holdings for €706million (£625million).
Rovio Entertainment confirmed over the weekend that it was in talks regarding a possible takeover by the Japanese gaming giant, famous for creating the Sonic the Hedgehog video game series.
On Monday, it revealed Sega had offered €9.25 per share and a €1.48 per share option, representing a 19 per cent premium to its closing share price on Friday.
Takeover: Rovio Entertainment, the developer behind the Angry Birds media franchise, has agreed to be purchased by Sega Sammy Holdings for £625million
Sega said the deal would help accelerate its growth in the international gaming industry, which is forecast to expand to a market worth $263.3billion within the next three years, while mobile gaming is set to boost its share of the total market to 56 per cent.
The firm added that the combination would help create synergies between the two businesses, including through taking advantage of Rovio’s global intellectual property and Beacon mobile gaming platform.
Following the announcement, Rovio shares jumped 17.9 per cent to €9.16 by mid-afternoon trading. Sega Sammy shares fell by over 4 per cent during the overnight session in Asia.
Haruki Satomi, president and chief executive of Sega Sammy, remarked: ‘I feel blessed to be able to announce such a transaction with Rovio, a company that owns ‘Angry Birds,’ which is loved across the world.’
He added: ‘Historically, as represented by the ‘Sonic the Hedgehog’ series, Sega has released countless video game titles to various gaming platforms.
‘I am confident that, through combination of both companies’ brands, characters, fanbase, as well as corporate culture and functionality, there will be significant synergies created going forward.’
Motive: Sega said the Rovio takeover would help accelerate its growth in the international gaming industry, which is forecast to expand to $263.3billion within the next three years
Founded two decades ago by three university students in Helsinki, Finland, Rovio was nearing bankruptcy when it launched Angry Birds, one of the most successful mobile games in history.
Dubbed highly addictive, the game involves a flock of colourful birds trying to protect their eggs from green-coloured pigs and has been downloaded more than 5 billion times.
Pop star Justin Bieber, novelist Sir Salman Rushdie, Mad Men actor Jon Hamm and former UK prime minister David Cameron have all acknowledged their love of Angry Birds.
Aside from online games, a miniature golf venue, comic strip, theme and activity parks, National Geographic books, and two Hollywood animated films based on the series have all been developed.
Yet despite the enormous success it has enjoyed with Angry Birds, Rovio has at times struggled to boost earnings and been forced to cut jobs amid an inability to replicate that success with another hit game series.
In 2018, the company closed its London-based game studio just a year after its launch following a drop in brand licensing income, tougher market competition and a profit warning.
The Covid-19 pandemic provided a revival in the group’s fortunes as tough lockdown restrictions on socialising in person meant people spent more time indoors, driving a boom in video game purchases.
However, revenues started flatlining again as Covid-related curbs relaxed, while its operating profits declined by almost a third from 2020 to 2022.
Before accepting a takeover bid from Sega, the company received an unsuccessful €683million offer from Tel Aviv-based gambling game designer Playtika Holding.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said Sega is ‘confident that there could be more eggs nesting at Rovio which are yet to hatch.’
She added: ‘It’s already been adept at eking out fresh life for classic characters like Sonic the Hedgehog, so the Japanese firm is clearly hoping the acquisition of Rovio will catapult it into fresh franchise success.’
