Virgin succumbs at last to EA advances

Retail Electronic Arts finally succeeds in Westwood Studios bid.

Electronic Arts has succeeded in its second attempt to buy Virgin Interactive's business when it announced a bid to buy Westwood Studios in a cash transaction worth $122.5 million.

Electronic Arts, the world's largest interactive entertainment software company, signed a definitive agreement to purchase all outstanding Westwood Studios stock - seen as Virgin's jewel in the crown - in addition to other studio assets of Virgin Interactive Entertainment, a division of Spelling Entertainment Group. It was unclear what would happen to Virgin's European business, which was not included in the sale.

In June, GT Interactive's bid to acquire Virgin Interactive from Viacom crashed after the two parties failed to agree terms (PC Dealer, 17 June).

EA attempted a failed buyout last year. Viacom's decision to spin off its games arm has left Virgin in a state of limbo for more than a year.

Brett Sperry, president and chief executive of Westwood, said: 'We were courted by many companies, but in the end we knew EA would provide us with the best infrastructure and support that we need to continue building great games.'

The acquisition of Westwood is expected to close at the end of September.

Founded in 1985 by Sperry and Louis Castle, the Las Vegas developer is known for the bestselling franchise Command & Conquer. Sperry and Castle have both signed five-year employment contracts under the deal.

Larry Probst, chairman and chief executive of Electronic Arts, said: 'We are pleased to announce the partnership, which combines one of the industry's top game development studios with EA's unmatched worldwide sales, marketing and distribution capabilities.'

Nick Gibson, analyst at Durlacher, commented: 'It's an excellent win for Electronic Arts. It has managed to get all the best parts of the business without any of the bad parts. EA is now absolutely dominant in both the console and the PC markets.'