Tencent will be seen with Ubisoft. Picture Courtesy: USA news

Tencent will be seen with Ubisoft. Picture Courtesy: USA news

Tencent seeks bigger stake in ‘Assassin’s Creed’ maker Ubisoft

Newsroom Aug 6, 2022

Tencent is hoping to buy a part of the additional stake in Ubisoft, the maker of the blockbuster “Assassin's Creed” video game franchise, from the Guillemot family, which owns 15% of the firm.

Overview:

  • Tencent Holdings Ltd plans to raise its stake in the French video game group Ubisoft Entertainment SA.
  • Tencent aims to become the single largest shareholder of the French company with an additional stake purchase.
  • Tencent aims to become the single largest shareholder of the French company with an additional stake purchase.

As the Chinese gaming giant shifts its focus to the international gaming industry, Tencent Holdings Ltd aims to boost its investment in the French video game company Ubisoft Entertainment SA. The most significant social media and gaming company in China, which purchased a 5% share in Ubisoft in 2018, reportedly got in touch with the Guillemot family, the founders of the French firm, and showed interest in growing its ownership of the business.

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Tencent’s move on the Tencent deal

A logo of Tencent is seen at its booth at the 2020 China International Fair. Picture Courtesy: Tencent

Tencent intends to increase its investment in Ubisoft, which has a market value of $5.3 billion. Still, the exact amount is unknown. According to three sources, Tencent plans to purchase a portion of the extra share held by the Guillemot family, which controls 15% of Ubisoft, the developer of the famous "Assassin's Creed" video game series.

Tencent may offer up to 100 euros ($101.84) per share to purchase the extra stake. In 2018, he invested 66 euros a share to acquire a 5 per cent ownership. The deal's specifics are still being worked out and might alter. After rising by 21 per cent earlier after Reuters reported the company's highest daily gain since 2004, Ubisoft shares ended the day on Thursday with an 11 per cent gain.

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The bulk of the shares in the holding company, Guillemot Corp SA, is owned by the Guillemot family, and its shares closed the day up 7.3%. Tencent's shares fell 2% while the Hang Seng Tech index remained unchanged. To expand its control and take over as the only shareholder of Ubisoft, Tencent will also reportedly seek to buy shares from the company's public shareholders, according to two of the people. According to the French company's most recent annual report, public shareholders own almost 80% of its shares. Ubisoft and Tencent choose not to comment.

After the Tencent comment

Tencent employee in Gaming Trade 2022. Picture Courtesy: Tencent

They could not immediately contact the Guillemot family's representatives for comment. Tencent's subsequent stake acquisition, its final significant international transaction before a regulatory crackdown in late 2020, would aid it in reducing some of the pressures in the local gaming business. The world's biggest video game market, China, has seen fierce competition recently.

One of the sources added, "Tencent is dedicated to closing the purchase since Ubisoft is such a crucial strategic asset to Tencent. At a high of 100 euros per share, Tencent's offer will represent a 127 per cent premium over the stock's three-month average price of 44 euros and close to the stock's historical price limit of 108 euros in 2018.

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Tencent claimed it sent the Guillemot family a term sheet, a non-binding offer describing an investment's fundamental terms and conditions, at a price "far above" the firm's current pricing to fend off possible rivals. The aggressive offer was made when significant players in the gaming industry worldwide have been scrambling in recent years to find excellent independent game developers, according to two of the people. Senior Tencent officials travelled to France in May to speak with the Guillemot family about the acquisition.

Internal Pressures

Since June last year, when it first froze gaming approvals for over nine months, China's gaming authority has not granted Tencent any other gaming licences domestically. None of the previous four batches has featured the corporation since it commenced approvals in April this year.

Tencent said in May that their domestic gaming income decreased 1% in the first quarter while increasing 4% internationally. Tencent stated in June that it would release its most popular mobile game, "Honor of Kings," internationally by the end of the year. Tencent has shares in the US video game producers Epic Games and Riot Games.

One of the most significant gaming transactions in history occurred in 2016 when he paid $8.6 billion for a majority share in the company that makes the "Clash of Clans" mobile game. Additionally, it announced this year that it would pay $1.3 billion to acquire fellow British video game firm Sumo. It also owns 9% of British video game business Frontier Developments. After the business revealed that its operating profit for 2021–2022 fell short of projections, Ubisoft, whose games include "Prince of Persia" and "Rainbow Six," anticipated a lower operating profit for 2022–2023 in May.

You can also download the Tournafest app from Google Play or App Store to play Esports Tournaments & Scrims games like BGMI, Free Fire MAX, Call of Duty, CS: GO, Valorant, Pokemon Unite & win exciting rewards! You may also organize Tournaments & fetch unmatched perks.

Until next time,

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