Quentin D. Solano
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Activision Blizzard to buy King Digital in deal worth $5.9 billion

Brings together makers of ‘Call of Duty,’ ‘Candy Crush Saga’

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When ‘Call of Duty’ met ‘Candy Crush‘

Activision Blizzard Inc. late Monday said it is acquiring King Digital Entertainment PLC for $5.9 billion, combining two giants of the videogame industry.

The deal gives Activision ATVI, +3.27% a powerhouse in console videogames with hit franchises such as “Call of Duty” and “World of Warcraft,” a beachhead in the fast-growing business of mobile games.

King KING, -0.50% shot to fame in 2012 with its hit “Candy Crush Saga,” helping to position casual and inexpensive smartphone apps as a viable alternative to pricier games played on TVs and personal computers. While many of King’s other mobile games haven’t reached the same level of success, “Candy Crush” and its sequel are still among the top-grossing apps on Apple Inc.’s AAPL, -0.47% App Store.

Activision Blizzard is buying King Digital Entertainment, maker of the smartphone hit 'Candy Crush,' in a $5.9 billion deal that creates a giant in the fast-growing mobile-game market.

Activision said it is paying $18 a share, a 20% premium to King’s 4 p.m. ET price of $14.96 on the New York Stock Exchange on Oct. 30. On Monday, King shares rose 3.9% to $15.54. Activision is using $3.4 billion in cash, plus a $2.3 billion loan, to pay for the deal.

In announcing the deal, Activision reported a profit of 21 cents a share, compared with 23 cents a year earlier. Analysts had expected profit of 15 cents a share, according to Thomson Reuters. The company also generated $1.04 billion in revenue, down from with $1.17 billion a year earlier, but above Wall Street’s expectation of $951.7 million.

An extended version of this story can be found at WSJ.com