14 years ago, Zynga nearly bought Supercell for $400 million
The Finnish company Supercell, known for mobile hits like Clash of Clans and Brawl Stars, once came close to becoming a subsidiary of Zynga, but the deal fell through. This was revealed by Zynga founder Mark Pincus on the Deconstructor of Fun podcast.
Clash of Clans
Pincus recalls that in 2012 he reached a preliminary agreement with Supercell's CEO Ilkka Paananen and planned to pay $400 million in cash for the company, but the agreement was not accepted by Zynga's board of directors. The management refused to approve the purchase, explaining that Zynga had recently spent $200 million on an unsuccessful acquisition of the studio OMGPOP.
"Until you prove that you can manage what you already have, we don't want you to buy anything else," Pincus quoted the board of directors.
After the refusal, Pincus considered using his position at Zynga to push the deal through, but a lawyer cautioned him. He warned that the founder would have to fire all board members and replace them with his own people, which could potentially lead to a lawsuit.
According to Pincus, he later often marveled at the board's decision-making process. In 2013, he stepped down as CEO of Zynga, and shortly after that, the management approved the acquisition of another company for $550 million (likely referring to NaturalMotion. — Ed. Note). Two years later, Pincus briefly returned as CEO and agreed to allocate $800 million out of the $1 billion available on the company's books for a stock buyback, which later turned out to be a good investment but left no room for new deals.
Now, Pincus regrets not having the courage 14 years ago to convince the management of the necessity to buy Supercell. Had he succeeded in making the deal, Pincus believes Zynga would be a much larger company today.
It’s worth noting that in 2022, Zynga itself was acquired by Take-Two Interactive for $12.7 billion.