Sonic the Hedgehog, meet Angry Birds. Sega is buying Rovio | CNN Business

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CNN
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Japan’s Sega, the company behind Sonic the Hedgehog, is buying Rovio Entertainment in a cash deal that values the creator of Angry Birds at €706 million ($774 million).

The Finnish video game developer’s board has unanimously backed the takeover offer, which is also already supported by shareholders owning 49.1% of the company’s stock, Rovio said in a statement Monday.

The company’s shares surged 18% to €9.16 ($10.05) per share in Helsinki. Sega Sammy Holdings

(SGAMY) has offered €9.25 ($10.15) per share, representing a 19% premium to Rovio’s closing price on Friday.

The stock has gained more than 50% this year amid speculation of a deal after Israel-based Playtika Holdings, a mobile game company, offered to buy Rovio in January.

The company’s prime asset, Angry Birds, which launched in 2009, became the first mobile game series to reach 1 billion downloads, according to Guinness World Records.

The story-based puzzle video game has players launching “Angry Birds” from a slingshot at a fortress containing pigs who stole their eggs. The game has evolved into a successful franchise with animations, merchandise and theme parks.

Alexandre Pelletier-Normand, CEO of Rovio, who said he grew up playing Sonic the Hedgehog, predicted “an incredibly exciting future” in combining the strengths of the game makers.

The acquisition is part of Sega’s five-year strategy to invest up to €1.7 billion ($1.9 billion), with a focus on growing its mobile gaming businesses.

“Among the rapidly growing global gaming market, the mobile gaming market has especially high potential, and it has been Sega’s long-term goal to accelerate its expansion in this field,” said Haruki Satomi, the CEO of Sega Sammy Holdings.

The company’s share price closed 4.2% down in Tokyo on Monday.

“A shared fascination with animals doesn’t guarantee future success,” said Russ Mould, investment director at UK online broker AJ Bell.

“Sega might be able to further milk Rovio’s existing intellectual property but very few titles can be regurgitated into successful new games and spin-off activities such as films and merchandise ad infinitum,” he added in a note.