SEGA Corporation resolved to implement a tender offer to acquire Rovio Entertainment, a mobile game company headquartered in Finland, through SEGA’s wholly-owned UK subsidiary SEGA Europe and SEGA SAMMY HOLDINGS has entered into a definitive agreement with Rovio pursuant to which the Tender Offer is made.
Through the Tender Offer, SEGA aims to acquire the entirety of Rovio’s outstanding shares and options at EUR 9.25 per share and EUR 1.48 per option, or EUR 706 million in total (approximately ¥103,680 million converted at EUR1 = ¥146.9 (FX rate as of April 14, 2023). The same FX rate is applied hereinafter). The Acquisition is a friendly takeover, as Rovio’s board of directors has agreed to, and has expressed support towards the Tender Offer. Shareholders in Rovio who in aggregate hold shares corresponding to approximately 49.1 percent of the outstanding shares and votes in Rovio, have irrevocably undertaken to accept the Offer, subject to certain customary conditions. The Acquisition is expected to close in the second quarter of FY2024/3 and is contingent on the completion of reviews under applicable antitrust laws and other customary conditions.
1. Background and purpose of the Acquisition
- Positioning of the Consumer business for the Company
The Company positions the Consumer segment of its Entertainment Contents Business as a growth area under its Mid-Term Plan (FY2022/3-FY2024/3), and has accelerated its efforts to strengthen the business through initiatives such as converting existing IPs into global brands, strengthening user engagement through multi-platform support and enhanced media mix, etc.
As a part of its growth strategy to invest up to ¥250 billion during the five-year period ending FY2026/3, the Company has been exploring investment opportunities in the Consumer area to strengthen its development capabilities as well as to create new ecosystems.
In order to strengthen global development capabilities, SEGA has historically acquired numerous development studios, from the UK-based The Creative Assembly Ltd. in 2005, to the Japan-based ATLUS. CO., LTD. (formerly, Index Corporation) in 2013, and the acquired studios have all greatly expanded its scale while also releasing many new titles across the globe.
Background of the Acquisition
The size of the global gaming market is projected to reach US$263.3 billion by 2026, growing at a CAGR of 3.5% from 2022 to 2026. The mobile gaming market in particular, is set to grow at a CAGR of 5.0% to represent 56% of the global gaming market overall, an increase from 53% in 2022. (Source: IDG Report (dated October, 2022))
The Company firmly believes that it is imperative to continue investing in its game development and operating capabilities, in order to further strengthen its position in this fast-growing mobile and global gaming market, which therefore led to the decision to acquire Rovio.
Through the Acquisition, the Company aims to take-in Rovio’s live-operated mobile game development capabilities and expertise in mobile game operation, to accelerate the development of mobile-compatible and multi-platform-supported version of SEGA’s existing game IPs, thereby strengthening and further accelerating global expansion of SEGA’s game portfolio.Purpose of the acquisitionRovio is a global mobile-first, games company that creates, develops and publishes mobile games, which have been downloaded over 5 billion times.
Rovio is best known for the global Angry Birds brand, which started as a popular mobile game in 2009, and has since evolved from games to various entertainment, anime, and consumer products through brand licensing.SEGA aims to accelerate its growth in the global gaming market and increase its corporate value by generating synergies between SEGA’s existing businesses and Rovio’s strengths, including its global IPs and live-operated mobile game development capabilitie
