US: Activision gets Candy Crush in tax-saving deal of $5.9 billion

Activision Blizzard’s plan to buy the Dublin-based maker of Candy Crush Saga for $5.9 billion not only gives it access to the fast-growing mobile gaming industry, it will help save taxes.

By using $3.6 billion of cash stored outside the US to help finance the acquisition of King Digital Entertainment, Activision will save about $1 billion in taxes it would have had to pay to repatriate the money, according to tax consultant Robert Willens. Investors, who initially sent Activision shares down as much as 6.3 percent, have reversed course. The stock gained as much as 9.3 percent in New York on Tuesday, and was up 6.5 percent as of 1:39 p.m.

Activision, known for the Call of Duty and World of Warcraft games played on consoles and PCs, is positioning itself to capitalize on growing smartphone-based play. At $18 a share, the biggest US video-game maker is paying 20 percent less than King’s initial public offering price of $22.50 in March 2014. The stock had fallen after the IPO on concerns that King may fail to diversify from its top-selling game and become a one-hit wonder.

Full content: Barron’s

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