Electronic Arts Completes DICE Purchase

Officials from giant publisher Electronic Arts have announced that the company has finally completed its acquisition of Digital Illusions CE (aka DICE), the Swedish-headquartered developers of the popular Battlefield series, following a long-running control battle with other major shareholders. Electronic Arts will pay 67.50 Swedish Kroner per share, or $8.80, in cash for the developer. This amount represents a 30 percent premium over DICE’s closing price as of March 16th, with Electronic Arts holding warrants which entitle it to purchase an additional 2.3 million shares, beyond the current 68 percent stake it recently gained. The company had considerable trouble gaining a stake greater than 50 percent after initial 2004 takeover attempts. At first, EA was forced to waive a number of the conditions of its offer, following considerable DICE stockholder resistance to the purchase, and despite the full backing of the DICE board, but has gradually accumulated the balance of the shares over time. After intense negotiations, Electronic Arts finally gained a controlling stake in January 2005, and now owns roughly 74 percent of the outstanding capital and votes in DICE. In fact, there had already been close collaboration between EA and DICE before this final announcement, with the company announcing that it has announced that it had licensed the right to develop the PSP, Xbox and PS2 versions of the untitled new game to Electronic Arts' UK studio in Chertsey, taking advantage of its majority shareholder's large studio system. However, while now basically completed, the final merger is still subject to shareholder ratification, and is not expected to close until September 2006.