Tencent increases investment in French video game maker Ubisoft
Tencent has agreed to increase its investment in French video game maker Ubisoft in a deal that values the family-controlled group at more than 10 billion euros.
The move comes amid a wave of consolidation in the video game industry that has seen indie studios taken over by tech giants. As one of the few remaining indies making big-budget titles, Ubisoft has long been seen as a takeover target, though the founding Guillemot family has long protected it fiercely, including from a raid by Vivendi in 2015.
As part of the deal announced on Tuesday, the Chinese tech giant agreed to pay 300 million euros to buy a 49.9% stake in Guillemot Brothers Limited, a vehicle that owns part of the family’s shares. , but it will only have 5% of the voting rights in the entity and no representation on the board of directors.
Tencent also has the option to increase the 4.5% working interest it holds in the maker of Assassin’s Creed and just dance since 2018 up to 9.99%.
The operation implies a valuation of €80 per share for Ubisoft, which is significantly higher than Tuesday’s closing price of €43.50.
The two would act together under a shareholders’ agreement, they said in a joint statement.
“The expansion of the concert with Tencent further strengthens the core of Ubisoft’s shareholding around its founders and provides the company with the stability essential for its long-term development,” said Yves Guillemot, CEO of Ubisoft. , in a press release.
“Following this transaction, Ubisoft’s governance will remain unchanged and Tencent will have no operational veto rights,” he added.
Tencent signed a standstill agreement that it will not sell its Ubisoft shares for five years or increase its stake beyond 9.99% for eight years.
“We are thrilled to extend our engagement with the founders, the Guillemot family,” said Tencent President Martin Lau, adding that Tencent plans to “bring some of Ubisoft’s best-known AAA franchises to mobile.”
Transactions have been commonplace in the industry since the start of the pandemic, a period that has seen a surge in gambling as other forms of entertainment have disappeared.
Big tech and entertainment companies are eager to get their hands on game studios with well-known and successful titles, with solid intellectual property seen as the most valuable asset in an industry that is already eclipsing others. forms of mass entertainment, including music and cinema.
Beginning with the purchase of a majority stake in the American group Riot Games in 2011, Tencent has amassed a sprawling portfolio of gaming investments in the United States, Europe and Asia.