Japanese gaming giant Sega will pay £625m for Rovio to “strengthen its position” in gaming.
Image source, RovioThe maker of the Angry Birds video games, Rovio Entertainment, has agreed to be taken over by Japanese gaming giant Sega Sammy Holdings.
The deal will see Sega, best known for its Sonic the Hedgehog character, paying €706m (£625m), for the company.
In February, Finland-based Rovio announced it had launched a review of the business, including holding discussions over a potential sale.
It confirmed on Saturday it was in talks with Sega.
Rovio held talks earlier this year with Israeli rival Playtika Holding over a potential takeover. However, those discussions ended last month without a deal.
Finland-based Rovio is best known for the Angry Birds brand, which started as a popular mobile game in 2009.
Angry Birds was the first mobile game to be downloaded one billion times, Rovio has said.
It has seen several spin-off versions, and the brand has also produced two Angry Birds movies.
Last year, the company said downloads across its stable of games had reached five billion.
However, Rovio has yet to come up with a follow-up to reproduce the global popularity of Angry Birds.
That had made it a potential takeover target for bigger gaming industry companies.
Rovio has around 550 employees across its eight game studios around the world.
At the end of trading on Friday, Rovio had a stock market valuation of $707m (£571m).
Sega Sammy is a Japanese global holding company formed by the merger in 2004 of video game giant Sega and Sammy Corporation in 2004.
Sega has produced several multi-million-selling video game franchises and is known globally for its Sonic the Hedgehog character.
Sammy develops and sells amusement arcade machines.