January 13th, 2009 by Arjan Olsder Posted in Companies & M&A | 7 Comments »
The market seems to be shaking with rumours on the big three. It's not that strange considering Glu is still in financial problems and EA is missing several key employees in their Mobile unit.
Over at PocketGamer, our friends discuss the possibility of EA acquiring Glu. Though Glu is slowly recovering from their last drop in value, the company is valued at only $ 24 million. Pocket money for a giant like EA that paid $ 700 million to acquire Jamdat some years back.
Based on a report, PocketGamer states the Asian market as one of the big selling points for the company. EA Mobile is still weak in the Asian market, so they would benefit greatly. Another interesting point would be the EU market. With Tim and Javier out, the company will have a real challenge to keep serving the market. Glu is very experienced in the region.
By acquiring Glu, the company would also take the third biggest publisher off the market and further increase the gap between itself and Gameloft (the number two). Besides that, Jump Games is rumoured to have shown interest in Glu as well. This means that Frash capital could flow into Glu and make it a healthy competitor again.
Something that is not discussed by PocketGamer though, is the possibility of Gameloft acquiring Glu. Gameloft never really did anything in the field of acquisitions, but if they suddenly would pop out their wallets, there is a big chance they could afford it. Acquiring Glu could even turn Gameloft into the new number one game publisher. EA already lost the leading position on the consoles to Activision Blizzard (former Vivendi). This would be another blow in the face of the giant.
EA is a publicly trading company. This means that they have to be open if they would be discussing the possibility of acquiring Glu. As so, we contacted EA on the matter. This is what our contact told us;
“With regard to Glu, it is not EA policy to comment on rumour and speculation. Obviously, I will update you when we have more to say.”
So officially, there is nothing going on. As usual, we will keep track of the story as it evolves. Needless to say, we do expect something to happen with Glu soon.
No matter which company is buying Glu it will force the others to act as well.
It will start a new M&A race.
Cheers for the link! That’s the reason I didn’t talk up the likelihood of Gameloft buying Glu – they’ve always focused on organic growth rather than acquisitions. Also, it might make more sense to throw more money at iPhone to try and overhaul EA, rather than make an acquisition that realistically won’t bring them extra deck slots, and could mire them in organisational chaos for months as they integrate Glu.
Of course, if they announce the deal tomorrow, I’ll look silly ;o)
This sounds more like someone putting rumours out to get the real suitors to act. Would be highly surprised if EA would buy Glu. Or Gameloft for that matter. Why would they want to get another company to restructure if they have enough problems on their hands already anyway?
@realist – i could’t agree more.
brilliant comment.
Still: If somone takes over it might be Sega or even Namco*.
*I know i know they just made it over here, but establishing everything from 0… I bet they look into this case atm.
my bet is on Disney or Real beside the two mentioned companies from P. cause also they have to do something urgently.
Checking the share price of gameloft today at 1,50 Euro, I guess they have other problems than thinking about buying Glu. With their share price falling and market cap they become an easy target for a big fish.
Gameloft will not sell and will not buy. Gameloft is owned by “the brothers”. Just see the investment of EA in Ubisoft. Gameloft will be maximum a small bonus if they ever want to sell Ubisoft to EA. I personally dont believe that anything will change at Gameloft in the near future.