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Amazon not expected to bid for Electronic Arts, says CNBC

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Amazon.com Inc is not expected to bid for Electronic Arts Inc, CNBC said on Friday, citing sources, quashing an earlier report that the online giant would make an offer today for the videogame publisher.

EA shares had jumped 15% in premarket trading after the report from USA Today on Amazon’s takeover offer for the “FIFA” and “Apex Legends” owner. The stock later pared gains and were last up about 6%.

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Amazon did not immediately respond to requests for comment from Reuters, while EA said it does not comment on rumors and M&A speculation.

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Sitting on a cash pile of about $37 billion, Amazon has hit the acquisition trail as it looks to diversify its business beyond e-commerce and cloud under new CEO Andy Jassy.

Its bids include a $1.7 billion offer for Roomba-maker iRobot Corp and $3.5 billion for primary care provider One Medical.

The company, which owns videogame live-streaming platform Twitch, has also purchased MGM studios, the maker of “Rocky” and “James Bond,” movies for $8 billion.

EA had a market value of $35.5 billion as of last close, having lost just about 3% of its value so far this year, far better than some of its peers.

Meanwhile, the video game space is also consolidating, with new deals blurring the line between personal computer and mobile gaming companies.

Microsoft is buying EA rival and “Call of Duty” maker Activision Blizzard Inc for $68.7 billion.

The deals come against the backdrop of a struggling global gaming industry as the surge in demand seen at the height of the pandemic cools down.

Earlier this month, EA forecast quarterly adjusted sales below estimates, with Chief Financial Officer Chris Suh saying that the company was not “completely immune” to recession.

(Reporting by Tiyashi Datta and Nivedita Balu in Bengaluru; Editing by Sriraj Kalluvila)

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