The acquisition will combine Electronic Arts, the Redwood City, Calif., maker of the Madden NFL franchise games, with Glu, San Francisco, known for its Covet Fashion, Deer Hunter, MLB Tap Sports Baseball, and Kim Kardashian: Hollywood games.
At last check shares of Glu Mobile leaped 35% to $12.61. They'd closed regular Monday trading up 2.2% at $9.39.
EA shares were unchanged after hours. They finished regular Monday trading up 0.9% at $142.46.
Both boards approved the terms. The deal is expected to close in the second quarter, subject to conditions including regulatory clearances and a vote of Glu holders.
"Our acquisition of Glu combines amazing teams and deeply engaging products to create a mobile games leader with proven expertise across many fast-growing genres," Andrew Wilson, chief executive of Electronic Arts, said in a statement.
"Mobile continues to grow as the biggest gaming platform in the world, and with the addition of Glu’s games and talent, we’re doubling the size of our mobile business. “
The combined companies will have a portfolio including more than 15 live services with a combined $1.32 billion in bookings over the past 12 months, EA said.
The combined organization will “build on EA’s network of 430 million players, including more than 100 million monthly active players in mobile,” EA said.
The transaction includes $364 million of net cash on Glu's books, giving the deal a total enterprise value of $2.1 billion, the companies said.
"As part of Electronic Arts, we will continue capitalizing on the opportunities ahead in the expanding mobile gaming industry,” said Nick Earl, CEO of Glu, in the statement.
The combined companies will be positioned to target “the biggest and most popular genres of mobile games, including sports, [role-playing], lifestyle, casual, and mid-core games,” according to the statement.