Activision to buy candy crush firm

Video game maker Activision Blizzard is to buy “Candy Crush Saga” creator King Digital Entertainment for $5.9 billion, as the heavyweight of console and PC gaming makes a major push into the faster-growing mobile market.

The deal would be one of the biggest in the industry in recent years, more than twice the size of Microsoft’s $2.5 billion purchase of “Minecraft” maker Mojang last year, and the biggest-ever acquisition of a mobile gaming company. The failure of King to replicate the success of Candy Crush with follow-up titles such as “Farm Heroes” and “Pet Rescue” has led some investors to worry it may be a one-hit wonder.

But Activision is betting its experience in sustaining long-running blockbuster franchises like “Call of Duty” and “World of Warcraft” can help it develop new hit series. The deal also gives the US company a major presence in the mobile market, where games sales are expected to grow 21 per cent this year, according to research firm Newzoo.

That compares with expected growth of 7 per cent for computer games and 2 per cent for TV and console games, although they will still represent the lion’s share of the $91.5 billion overall industry, according to researchers. Activision is paying $18 per share in cash, a takeover premium of 16 per cent over King’s current market value.