Electronic Arts (EA) has announced it will buy British game developer Codemasters for $1.2 billion.

The US video game company expects the deal to complete in the first quarter of next year.

EA said the merger will drive growth for both companies’ racing franchises, which include Codemasters’ Formula One game.

The deal is part of EA’s aim to develop a market-leading portfolio of racing games.

Frank Sagnier, chief executive of Codemasters, and Rashid Varachia, chief financial officer of Codemasters, along with the senior executive management team of Codemasters intend to remain with Codemasters following completion of the acquisition and will continue to lead the Codemasters business within EA’s organisation.

“Electronic Arts and Codemasters have a shared ambition to lead the video game racing category,” said Gerhard Florin, chairman of codemasters. “The Board of Codemasters firmly believes the company would benefit from EA’s knowledge, resources and extensive global scale – both overall and specifically within the racing sector.

“We feel this union would provide an exciting and prosperous future for Codemasters, allowing our teams to create, launch and service bigger and better games to an extremely passionate audience.”

Andrew Wilson, chief executive of EA, said: “We believe there is a deeply compelling opportunity in bringing together Codemasters and Electronic Arts to create amazing and innovative new racing games for fans. Our industry is growing, the racing category is growing, and together we will be positioned to lead in a new era of racing entertainment.

“We have admired Codemasters’ creative talent and high-quality games for many years.”

He added: “With the full leverage of EA’s technology, platform expertise, and global reach, this combination will allow us to grow our existing franchises and deliver more industry-defining racing experiences to a global fan base.”

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