EA Agrees to $1.2 Billion Deal for Codemasters, Take-Two Now Reconsidering Its Lower Bid

Most of the time, big consolidation moves in the video game industry are outwardly humdrum; one large company moves to acquire a publisher or developer and that’s that (or at least it is until reorganization woes come to light). In the case of Dirt and Formula One developers Codemasters, things just got more interesting over the weekend: Take-Two, which was originally leading on acquisition talks, has now been outbid by Electronic Arts. With a $1.2 billion bid agreed to, it looks like EA set to snap up Codemasters.

In a new press release, EA says it has reached an agreement with Codemasters’s board to buy the UK-based company at approximately $7.98 per ordinary share, which adds out to the total $1.2 billion valuation. EA anticipates that the acquisition will be completed in the first quarter of 2021’s calendar year.

Take-Two, which announced its intentions to buy Codemasters last month (valuing it at approximately $6.40 per share), has already responded to news of EA’s bid. Its new statement is brief: “Take-Two is considering its position in relation to Codemasters and a further announcement will be made when appropriate.”

Where acquiring Codemasters would give Take-Two a significant foothold in the racing games market, adding it to EA’s roster would see the team joining fellow UK developers Criterion, who earlier this year were put back in charge of the Need For Speed franchise. EA’s press release on the bid gestures to the overlap between the array of Codemasters racing franchises and those held by EA—also, it makes mention of the EA Sports brand, which one could see becoming the umbrella for future Formula One games should the acquisition go through.

Frank Sagnier and Rashid Varachia, respectively the CEO and CFO of Codemasters, would intend to remain at the company along with other senior executives to lead it as part of EA. When Take-Two initially announced its intentions to possibly pick up Codemasters, nothing regarding the continuation of key executives post-acquisition had been publicly disclosed in the statement.