Take-Two to acquire Borderlands maker Gearbox for $460 million

Take-Two Interactive Software announced on Wednesday the acquisition of Gearbox Entertainment, renowned for its flagship first-person shooter game, Borderlands, from Sweden’s Embracer. The acquisition deal, valued at $460 million, marks a significant move in the gaming landscape, reflecting a notable shift in ownership and strategic partnerships within the industry.

Take-Two will pay the entire purchase price of $460 million to Embracer Group in Take-Two shares, instead of cash. 

Interestingly, the acquisition comes at a substantial discount for Embracer, which originally acquired Gearbox in a deal valued at up to $1.4 billion back in 2021. Embracer’s decision to sell Gearbox at a reduced price underscores the evolving dynamics of the gaming market and the strategic imperatives faced by companies seeking to optimize their portfolios and financial positions.

In a separate statement addressing the financial implications of the deal, Embracer highlighted that the transaction with Take-Two would significantly reduce its net debt by approximately 3.2 billion crowns ($301.23 million), bringing it down to 3.5 billion crowns. Furthermore, Embracer anticipates that the acquisition will immediately bolster its free cash flow generation, aligning with its ongoing efforts to streamline operations and enhance financial resilience.

“Our acquisition of Gearbox is an exciting moment for Take-Two and 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.”

Under the terms of the acquisition, Gearbox will operate as a distinct studio within 2K, a publishing label owned by Take-Two. Founder and CEO Randy Pitchford will continue to lead Gearbox, ensuring continuity and preserving the studio’s creative vision and identity. The completion of the acquisition is slated for the first quarter of Take-Two’s fiscal year 2025, signaling a strategic alignment of resources and capabilities between the two entities.

“With nearly 20 years of history working together, Gearbox has played an integral role in our success, given their unique ability to create interactive entertainment experiences that feature beloved characters, exciting new worlds, and humorous storytelling,” said David Ismailer, President of 2K. “We are thrilled to welcome Randy Pitchford and his team of passionate, talented developers to 2K and we look forward to releasing numerous projects in the future as colleagues. We have loved partnering with Gearbox on every iteration of the Borderlands franchise and are excited to be in active development on the next installment in the series.”

“Joining forces with Take-Two Interactive and 2K will help Gearbox ascend to our next level,” said Randy Pitchford, Founder and CEO of Gearbox Entertainment. “Take-Two and 2K have demonstrated repeatedly their commitment to our engine of generating creativity, happiness, and profit. 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. I’m incredibly excited about what we can accomplish now that we’re fully aligned as one.”

Written by Maya Robertson


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