What EA's Purchase Of Codemasters Means For Its Racing Game Offerings

Get ready to game. Electronic Arts (EA) has entered into a $1.2 billion deal to purchase Codemasters – a U.K.-based game developer and publisher – adding to its racing franchise.

Through the deal, EA will pickup Formula One, DiRT, DiRT Rally, Grid, and Project Cars gaming collections from Codemasters. The racing categories will add to EA’s Need for Speed franchise, Real Racing mobile games, and EA Sports brand, growing its content offering and global audience for racing entertainment.

The EA acquisition, which is considered the biggest deal in the company’s history, comes as the gaming industry has seen a surge amid the coronavirus pandemic as more people stay home, CNBC said.

EA hopes to leverage its own game analytics, live services operations, and technology to further deepen and accelerate Codemasters’ performance through the use of its development technology, art & motion capture, quality verification, compliance, and localization teams.

“We believe there is a deeply compelling opportunity in bringing together Codemasters and Electronic Arts to create amazing and innovative new racing games for fans,” Andrew Wilson, CEO of Electronic Arts, said. “Our industry is growing, the racing category is growing, and together we will be positioned to lead in a new era of racing entertainment."

EA also intends to expand the development and delivery of the racing platforms to more players around the world through its subscription services.

“Electronic Arts and Codemasters have a shared ambition to lead the video game racing category,” Gerhard Florin, the Chairman of Codemasters, said. “The Board of Codemasters firmly believes the company would benefit from EA’s knowledge, resources and extensive global scale – both overall and specifically within the racing sector. We feel this union would provide an exciting and prosperous future for Codemasters, allowing our teams to create, launch and service bigger and better games to an extremely passionate audience.”

EA’s deal for Codemasters upended a previous transaction that was supposed to take place with competitor publisher Take-Two Interactive, CNBC reported. The company, which produces the Grand Theft Auto and Red Dead games, had agreed to purchase Codemasters for about $971 million last month.

Under the transaction with EA, shareholders will receive about $7.96 in cash for each ordinary share of Codemasters. The deal is expected to be completed in the first quarter of 2021.

Shares of EA were trading at $137.97 as of premarket open on Monday, up $2.17 or 1.60%.