Why Electronic Arts Is Buying Codemasters For $1.2 Billion

By Amit Chowdhry ● Dec 15, 2020
  • Electronic Arts Inc. (NASDAQ: EA) recently announced it reached an agreement to buy UK-based racing game developer Codemasters in a deal that is valued at $1.2 billion. These are the details.

Electronic Arts Inc. (NASDAQ: EA) recently announced it reached an agreement to buy UK-based racing game developer Codemasters in a deal that is valued at $1.2 billion. As part of the deal, Codemasters’ shareholders will be entitled to receive 604 pence (approximately US$7.98) in cash for each ordinary share of Codemasters with an implied enterprise value of US$1.2 billion. And the acquisition is anticipated to be completed in the first quarter of calendar 2021.

Electronic Arts said it believes the combination of EA and Codemasters will enable further growth and success for Codemasters and EA’s popular and innovative racing franchises. And bringing together the combined expertise and talent from Codemasters’ critically-acclaimed sports and racing franchises Formula One, DiRT, DiRT Rally, Grid and Project Cars with EA’s global Need for Speed franchise, fan-favorite Real Racing mobile game and EA SPORTS brands will the company to innovate further, and meaningfully increase the delivery of content and experiences to a growing, global audience for racing entertainment. Codemasters’ deep creative talent is known for producing high-quality racing games for many years, including the Formula One franchise that continues to deliver great entertainment for F1’s growing fan base.

EA believes it can help accelerate Codemasters’ performance by utilizing EA’s deep expertise in live services operations, game analytics and technology. And in addition, EA’s central services teams across development technology, art & motion capture, quality verification, compliance, and localization will all be resources available to Codemasters. Plus EA’s global publishing, marketing and game development support capabilities will also strengthen Codemasters’ existing capabilities, expanding the addressable market for Codemasters’ franchises.

The combination of Codemasters and Electronic Arts will enable the development of a market-leading portfolio of creative and exciting racing games and content to more platforms and more players around the world. And the union also creates ongoing and expanded ways for players to engage with the combined portfolio of sports and racing games through EA’s industry-leading multi-platform subscription services.

Combining Codemasters and Electronic Arts also delivers compelling financial benefit to the combined group. And the acquisition is expected to grow net bookings and underlying profitability.

Frank Sagnier, Chief Executive Officer of Codemasters, and Rashid Varachia, Chief Financial Officer of Codemasters — along with the senior executive management team of Codemasters — intend to remain with Codemasters following completion of the acquisition and will continue to lead the Codemasters business within EA’s organization.


“Electronic Arts and Codemasters have a shared ambition to lead the video game racing category. The Board of Codemasters firmly believes the company would benefit from EA’s knowledge, resources and extensive global scale – both overall and specifically within the racing sector. We feel this union would provide an exciting and prosperous future for Codemasters, allowing our teams to create, launch and service bigger and better games to an extremely passionate audience.”

— Gerhard Florin, the Chairman of Codemasters

“We believe there is a deeply compelling opportunity in bringing together Codemasters and Electronic Arts to create amazing and innovative new racing games for fans. Our industry is growing, the racing category is growing, and together we will be positioned to lead in a new era of racing entertainment. We have admired Codemasters’ creative talent and high-quality games for many years. With the full leverage of EA’s technology, platform expertise, and global reach, this combination will allow us to grow our existing franchises and deliver more industry-defining racing experiences to a global fan base. We are pleased that both our Boards of Directors are recommending this transaction, and we look forward to welcoming such an exciting and talented team to the Electronic Arts family.”

— Andrew Wilson, CEO of Electronic Arts