The second largest U.S. game producer Electronic Arts Inc. (EA) plans to buy PopCap Games, creator of Bejeweled and Plants vs. Zombies, for nearly $1.3 billion in order to expand mobile gaming presence.

EA is to pay $650 million in cash and $100 million in EA shares for PopCap, with possible earn-outs that can total the $1.3 billion in two years. These contingent conditions for PopCap sellers are determined by contingent upon the achievement of certain non-GAAP earnings before interest and tax (EBIT) performance milestones through December 2013, as stated in the official EA press release.

Popular for creating The Sims and Madden NFL, Electronic Arts plans to close the transaction in August of this year, unless regulatory approvals hinder this schedule. This marks the biggest purchase ever made by Electronic Arts ever since it acquired Playfish Inc. in late 2009.

Electronic Arts made a statement that its intent was to increase and cultivate its digital game sales. PopCap's great studio talent and powerful IP add to EA's momentum and accelerate our drive towards a $1 billion digital business, said EA CEO John Riccitiello. EA's global studio and publishing network will help PopCap rapidly expand their business to more digital devices, more countries, and more channels.

PopCap Games began 10 years ago when it created a slew of casual games for PC before it ventured into creating games for mobile devices and social media, currently with more than 150 million games worldwide. Popular titles include Peggle, Bookworm, Chuzzle, Plants vs. Zombies and the beloved Bejewled. According to the Wall Street Journal, PopCap executives reported $100 million in revenue last year.

The release itemizes the possible payout scenarios to reach the $1.3 billion for earnings by December 2013 given to PopCap. In brief, sellers receive $100 million if earnings total $110 million, $275 million if earnings are $200 million and $550 million if sellers acquire $343 million or more. Sellers receive nothing if the two-year cumulative earnings don't reach $91 million, though EA plans to give $50 million in equity retention awards to PopCap employees over the next four years.

Though EA posted GAAP net revenue of $3.6 billion for the fiscal year 2011, its shares fell almost 4 percent to approximately $23 on Tuesday upon the announcement.