Video game publisher Take-Two Interactive Software said on Thursday that it has struck a definitive agreement with Embracer Group to acquire The Gearbox Entertainment Co., the maker of the Borderlands franchise, for $460 million in stock.
The companies have worked together for nearly 20 years.
Take-Two said it expects the transaction “to deepen its successful relationship with Gearbox Entertainment and to provide increased financial benefits through a fully-integrated operational structure,” adding: “Take-Two will acquire Gearbox’s extensive portfolio of intellectual property, including full ownership of the critically and commercially acclaimed Borderlands and Tiny Tina’s Wonderlands franchises, as well as Homeworld, Risk of Rain, Brothers in Arms, Duke Nukem, and Gearbox’s future pipeline.”
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The companies said that Gearbox currently has six key interactive entertainment projects in various stages of development, including five sequels, two of which are from the Borderlands and Homeworld franchises, “and at least one exciting new intellectual property.” Beyond that, Take-Two said “there are incremental opportunities to invest in new projects and to expand Gearbox’s proven franchises.”
The deal excludes certain third-party publishing and other assets that Take-Two deemed non-core.
It “will strengthen our industry-leading creative talent and portfolio of owned intellectual property, including the iconic Borderlands franchise,” said Strauss Zelnick, chairman and CEO of Take-Two. “This combination enhances the financial profile of our existing projects with Gearbox and unlocks the opportunity for us to drive increased long-term growth by leveraging the full resources of Take-Two across all of Gearbox’s exciting initiatives.”
The transaction is anticipated to be completed during the fiscal first quarter of Take-Two’s fiscal year 2025, which ends on June 30, 2024. It is subject to the satisfaction of customary closing conditions, including regulatory approvals.
“Joining forces with Take-Two Interactive and 2K will help Gearbox ascend to our next level,” said Randy Pitchford, founder and CEO of Gearbox. “We set the bar for interactive entertainment and achieved remarkable results with groundbreaking, record-setting games when we worked together at arm’s length as partners.”
Gearbox will operate as a studio within Take-Two unit 2K and will be led by Pitchford and his management team. Gearbox operates studios in Frisco, Texas, as well as Montreal and Quebec City, Canada.
