Codemasters has reached agreement with Take-Two and expects sale to complete early next year

Codemasters has reached a formal agreement with Take-Two on the terms of its sale, in a cash and shares offer which values the UK-based racing game firm at around £750m ($980m).

In a note sent to investors on Tuesday, the two companies said they anticipate that the acquisition will complete in the first quarter of 2021, subject to shareholder approval in an upcoming general meeting.

Following the deal’s completion, Codemasters will run within Take-Two’s 2K label under its existing leadership of CEO Frank Sagnier, CFO Rashid Varachia and the rest of its senior management team.

Codemasters is the UK-based publisher of racing games including Dirt, F1, Grid and OnRush. The company has also recently secured the rights to the FIA World Rally Championship (WRC) and in 2019 it acquired Slightly Mad, the developer of the Project Cars series and Fast & Furious Crossroads.

Take-Two is the owner of the 2K and Rockstar labels, as well as its sports brand 2K Sports, under which it publishes NBA 2K and PGA 2K.

In a statement published on Tuesday, Take-Two CEO Strauss Zelnick said he believed that Codemasters’ racing games line-up would fit well within its own roster of sports games.

“We are exceedingly pleased to announce this recommended transaction with the Board of Codemasters,” he said.

“Codemasters has a renowned history of creating some of our industry’s most beloved and commercially successful racing franchises, and we believe that their offerings will be highly complementary to our sports portfolio and enhance further our organization’s long-term growth.

“Moreover, we look forward to welcoming Codemasters’ senior management and development teams into our Take-Two family, and sharing in our vision to deliver the highest quality entertainment experiences and aim to be the most innovative, creative and efficient company in our industry.”

Commenting on the acquisition, Codemasters chairman Gerhard Florin claimed it would bring the company long term success.

“With a leading position in sports gaming, the Board of Codemasters firmly believes the Company will benefit from Take-Two’s broad capabilities which will help propel the long term success of Codemasters,” he said.

“In recommending this Offer to shareholders, the Board of Codemasters believes it is in the best interests of all stakeholders in the Company. Take-Two’s offer reflects the great work the management team has done since listing on AIM in 2018 at 200p and delivers an excellent return for shareholders in just two and a half years.”