Notable Mergers and Acquisitions of the Day 11/9: ERTS, GE/CMCSA, EWBC
- Electronic Arts Inc. (NASDAQ: ERTS) today announced it has acquired Playfish, a leading creator of social network games. The acquisition accelerates EA's position in social entertainment and strengthens its focus on the transition to digital and social gaming. Playfish will operate within EA Interactive, a division of EA focused on the web and on wireless.
EA has acquired Playfish for approximately US$275 million in cash and approximately $US25 million in equity retention arrangements. In addition, the sellers are entitled to additional variable cash consideration, up to a maximum of US$100 million, contingent upon the achievement of certain performance milestones through December 31, 2011.
"Social gaming, with its emphasis on friends and community, is seeing tremendous growth and this is the right time to invest to strengthen our participation in this space," said Barry Cottle, Senior Vice President and General Manager of EA Interactive. "EAi has been successfully leading the charge for EA, and with the addition of proven expertise from Playfish, their broad consumer base and strong game brands, we're moving ahead aggressively in our plans to lead in the category of cross-platform social entertainment."
"The industry is undergoing dramatic transformation and joining EA is the ideal opportunity for us to push forward our goals to lead in the social entertainment evolution on a faster and much larger scale," said Kristian Segerstrale, CEO and Co-founder of Playfish. "EAi's vision and entrepreneurial culture are consistent with our own, and together, we are in position to be the company that defines new and innovative connected experiences that will change the way people play games."
- A clearer road has been paved for the potential joining of General Electric (NYSE: GE) and Comcast (NASDAQ: CMCSA) with the recent valuation of NBC Universal. The acquisition would give Comcast control of the GE movie and television company, according to those familiar with the venture.
The two sides have been negotiating for weeks and have agreed to value NBC Universal at $30 billion. According to the terms of the deal, the amount of cash that Comcast would have to put up will be reduced when the deal closes.
According the people close to the matter, the two companies could finish deliberating and reach a final deal by the end of this week.
One roadblock does still remain that could hamper or even undo the potential deal between Comcast and GE. The French media and telecom company, Vivendi, has not made it apparent whether it has agreed to the potential deal. Vivendi owns a 20% stake in NBC Universal and has made it clear that it wants to sell its share in the company. Vivendi has not stated if it has agreed to the Comcast terms.
If the deal does eventually get done, the largest U.S. cable operator’s number of networks would be merged with NBC Universal’s television networks and local stations, along with its movie studio, creating an enormous media entity.
At the close of the deal Comcast would gain a 51% stake in the combined company, with GE initially controlling 49%. Vivendi would be bought out of its stake entirely. GE’s remaining stake in the combined company would be bought out over the course of the next seven years. According to those close to the deal, the two companies have also agreed on how to value the combined company over the next seven years.
- East West Bancorp, Inc. (NASDAQ: EWBC) announced today that it has acquired the banking operations of San Francisco, California based United Commercial Bank (UCB) in a Federal Deposit Insurance Corporation (FDIC) assisted transaction. Under the terms of the transaction, East West will receive $10.4 billion in assets, including $7.7 billion in loans, and assume $9.2 billion in liabilities, including $6.5 billion in deposits of UCB. The FDIC and East West have entered into a loss sharing agreement covering substantially all acquired loans.
This strategically compelling and financially attractive transaction creates the second largest independent bank headquartered in California and the largest bank in the nation focused on serving the Asian American community. East West Bank, now over $19 billion in assets, operates 137 branches worldwide, including 112 branches in California and 21 branches in key markets across the country, including New York, Atlanta, Boston, Houston, and Seattle. East West operates four full-service branches in Greater China, including two branches in Hong Kong, and branches in Shanghai and Shantou. The bank also has representative offices in Beijing, Guangzhou, Shanghai and Shenzhen, China, and Taipei, Taiwan. The Shanghai, China, subsidiary of United Commercial (UCB-China), was also part of today's transaction. The agreement between the FDIC and East West Bank will not affect the normal business operation of UCB-China. East West Bank will extend support to UCB-China where necessary.
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