UPDATE 2-Take-Two to acquire Borderlands maker Gearbox from Embracer for $460 mln

(Adds Embracer CEO comment in paragraph 5, adds detail on acquisition in paragraph 6)

March 28 (Reuters) - U.S. video game publisher Take-Two Interactive Software said on Wednesday it would acquire Gearbox Entertainment, best known for the first-person shooter game Borderlands, from Sweden's Embracer for $460 million.

The Swedish group is selling the game developer for a steep discount, having bought it in a deal that valued the business at up to $1.4 billion in 2021.

In a separate statement, Embracer said the deal with Take-Two would cut its net debt by about 3.2 billion crowns ($301.23 million) to 3.5 billion crowns and that it expected the transaction to be immediately accretive to its free cash flow generation.

Embracer, the owner of the Tomb Raider video game franchise, has been carrying out a restructuring programme since last year, aiming to cut debt. It said last month that it may fall short of its March net debt target of 8 billion crowns.

Embracer CEO Lars Wingefors said that Gearbox's acquisition "marks the result of the final structured divestment process and is an important step in transforming Embracer into the future with notably lower net debt and improved free cash flow".

Gearbox will operate as a studio within 2K, a publishing label owned by Take-Two, and will be led by founder and CEO Randy Pitchford, Take-Two said. The acquisition is set to be completed during the first quarter of Take-Two's fiscal year 2025.

Reuters reported last year, citing people familiar with the matter, that Embracer had been considering options for Gearbox as it looked to shore up its finances.

The Swedish company suffered a setback in May last year when a $2 billion partnership deal with an undisclosed company fell through, which led it to announce a major restructuring plan in June. ($1 = 10.6232 Swedish crowns) (Reporting by Rishabh Jaiswal in Bengaluru; Editing by Janane Venkatraman and Mrigank Dhaniwala )