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FTC Wants More Information About Take-Two Takeover

| 17 Apr 2008 15:50
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The U.S. Federal Trade Commission has made a second request to Electronic Arts for information regarding its attempted acquisition of Take-Two Interactive.

The nature of the information requested by the FTC is unknown, but is presumed to be a part of the Commission's ongoing investigation of the potential takeover to ensure it will not violate anti-trust statutes. In a statement, the company said, "While EA believes that its proposed transaction with Take-Two would not be anti-competitive, the FTC has not yet reached any conclusions regarding the proposed acquisition and has indicated that it needs further information and additional time to conduct its review."

According to a GamePolitics report, anti-trust concerns were fueled by comments made in February by Wedbush Morgan analyst Michael Pachter, who said that despite public perception of Rockstar as the crown jewel of the deal, EA's real target in the takeover is Take-Two's 2K Sports division. "Currently, (EA and Take Two) compete in pro basketball, college basketball and hockey," Pachter said at the time. "So by taking out all of that, EA has a monopoly in sports. If these guys have a monopoly, they're not going to cut pricing on sports games as quickly.

"We've been seeing sports games come down (in price) before Christmas the last couple of years," he continued. "That'll never happen again. That's worth a lot (to EA). Everything else is just gravy. GTA is just gravy."

Disclosure(s): Strauss Zelnick, Chief Executive Officer and Chairman of the Board of Directors of Take-Two Interactive Software, Inc., is the head of ZelnickMedia, an investor in both Take-Two and Defy Media, LLC, our parent company. This article was published without approval or consent of ZelnickMedia or Take-Two.
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