The deal, expected to complete by the spring of next year, values Dublin-based King at $18 per share – a 20 per cent premium over its closing price on 30 October.
However, this is still below the $22.50 that King priced its shares at when it made its debut on the New York Stock Exchange in March last year.
King chief executive Riccardo Zacconi said: “We are excited to be entering into this acquisition with Activision Blizzard.
“Since 2003, we have built one of the largest player networks on mobile and Facebook, with 474 million monthly active users in the third quarter 2015, and our talented team has created some of the most successful mobile game franchises.”
He added: “We believe that the acquisition will position us very well for the next phase of our company’s evolution and will bring clear benefits to our players and employees.”
Activision Blizzard is best known for titles including Call of Duty, Guitar Hero and World of Warcraft. It said the purchase of King would create one of the world’s biggest entertainment networks with more than 500 million monthly active users in 196 countries.
Chief executive Bobby Kotick said: “The combined revenues and profits solidify our position as the largest, most profitable standalone company in interactive entertainment.
“Our potential to reach audiences around the world on the device of their choosing enables us to deliver great games to even bigger audiences than ever before.”