Tencent Acquires 49.9% "Minority Passive Stake" In Ubisoft Founder's Company
In the latest round of video game firm acquisition news, Ubisoft has announced that Tencent has acquired "a 49.9% economic stake with 5% voting rights in Guillemot Brothers Limited", Ubisoft's largest shareholder and a company formed by Ubisoft's CEO and founder Yves Guillemot and his family.To get more tencent latest news, you can visit shine news official website.
In a press release, Ubisoft states that this investment will strengthen the company's "core shareholding via the expansion of the concert around the group's founders to the benefit of its long-term stability and development".
The investment totals €300 million, which breaks down as €200 million in share acquisition and €100 million in capital increase. The official statement also mentions that Tencent is providing Guillemot Brothers with "a long-term unsecured loan to refinance its debt" as part of the deal.This partnership will presumably help with Ubisoft's efforts in the Chinese gaming market, and the press release specifically mentions the "development of mobile titles from several of Ubisoft's major franchises and the launch of several of Ubisoft's PC titles in China".
Tencent has dumped another small fortune into one of gaming’s biggest companies. Ubisoft announced on Tuesday that the Chinese conglomerate would being increasing its investment in the Assassins’ Creed maker by nearly $300 million through an elaborate set of financial maneuvers.
Namely, rather than buy up shares of Ubisoft directly, Tencent is buying a 49.9 percent economic stake in Guillemot Brothers Limited, the chief investment vehicle through which Ubisoft’s founders have managed their control of the French publisher over the years. This is in addition to a 4.5 percent stake it already had in Ubisoft. Tencent paid almost double what the shares are currently worth to make it happen.Despite now owning more of Ubisoft than the Guillemot family, however, Tencent, which has been slowly buying up chunks of other studios and publishers across the video game industry, will only have 5 percent voting rights within Guillemot Brothers Limited. The message Ubisoft CEO Yves Guillemot and the other founders want to send is clear: this isn’t a takeover.
News of a potential deal with Tencent was first reported by Reuters back in early August. And prior to that, there were reports of private equity being interested in potentially buying into Ubisoft as well. It all comes in the wake of major industry consolidation after Take-Two bought Zynga earlier this year and Microsoft attempts to get regulatory approval to takeover Activision Blizzard.
But Ubisoft’s position is still unique. The company has been facing a litany of workplace complaints following a reckoning with reports of employee misconduct in the summer of 2020, and has struggled to find a new hit outside of the Assassin’s Creed franchise amidst continual production delays and middling releases. In the wake of yet another disappointing financial quarter, CEO Yves Guillemot also called on staff to cut expenses wherever possible in July.
Tencent hasn’t been faring too well either. Tens of billions in value have evaporated over the last year, and it laid off thousands of employees for the first time in nearly a decade due to falling revenues. At least part of the problem comes from a failure to get licenses to release new games in China. The company’s partnership with Ubisoft includes bringing PC versions of the publisher’s biggest franchises to China, as well as helping release mobile adaptations.
The recent turmoil hasn’t slowed down Tencent’s continued spending spree in gaming, however. In addition to the Ubisoft deal, it announced a $260 million joint investment in Elden Ring maker FromSoftware with Sony just last week. That’s on the back of a bunch of other recent investments in smaller companies like Life is Strange maker Dontnod.