Take-Two Interactive, maker of “Grand Theft Auto” and “Red Dead Redemption”, is buying from Zynga, maker of “FarmVille” and “Words With Friends”, in a cash and stock deal valued at approximately $12.7 billion.

Zynga shareholders will receive $3.50 in cash and $6.36 in Take-Two common stock for each Zynga share outstanding at closing. The transaction is valued at $9.86 per Zynga common share.

Zynga Stock Price – ZNGA

“This strategic combination brings together our best consoles and PC franchises, with a diverse, market-leading mobile publishing platform that has a rich history of innovation and creativity,” said President and CEO of Take-Two, Strauss Zelnick, in one He will retain these roles when the companies become one.

Two-Two anticipates that the agreement will help bring mobile versions of some of its consoles and PC-based games.

Take-Two Stock Price – TTWO

Two-Two said on Monday that it anticipates annual cost savings of approximately $100 million in the first two years after the transaction is completed.

The CEO of Zynga, Frank Gibeau, and its president of publishing, Bernard Kim, will oversee the integration and day-to-day operations of the The combined businesses of Zynga and T2 Mobile Games, which will operate under the Zynga brand as its own seal within Take-Two.

Two-Two will also expand its board to 10 members after it closes, adding two Zynga board members.

The transaction includes a go-shop clause, giving Zynga 45 days to hear alternative offers.

Shares of Zynga Inc, based in San Francisco, jumped 52.5% to $9.15. Shares of Take-Two Interactive Software, Inc., based in New York City, fell 8.7% to $150.25.