Chinese tech giant Tencent has announced that it has acquired a minority stake in French video game company Ubisoft as part of a deal that will also see it enter into a partnership with the company’s founders, the Guillemot family. The deal, which values Ubisoft at €80 per share, will see Tencent acquire a 49.9% economic stake in Guillemot Brothers Limited, with 5% voting rights, which owns a large proportion of the video game company’s share capital, in a transaction worth €300m ($357m).
In a statement, Yves Guillemot, CEO and co-founder of Ubisoft, said: “The expansion of the concert with Tencent further reinforces Ubisoft’s core shareholding around its founders and provides the company with the stability essential for its long-term development. In a context where platforms and business models are converging, this transaction, which validates our strategy and highlights the strong intrinsic value of the assets we have built over the long term, is excellent news for our teams, gamers and shareholders.”
Guillemot added that Tencent is a “key shareholder partner for many of the industry’s leaders, who have created some of the most outstanding video games. This transaction reinforces our ability to create strong value over the coming years.”
In regard to Ubisoft, Tencent President Martin Lau said: “The team at Ubisoft has shown an impressive ability to consistently create world-class entertainment along with a diverse portfolio of brands that include some of the most successful franchises in the industry. We are excited to expand our engagement with the founders, the Guillemot family, as Ubisoft continues to develop immersive game experiences, and to bring some of Ubisoft’s most well-known AAA franchises to mobile. This agreement also aligns with our philosophy to invest alongside creative founders with full confidence that they will lead their companies to new heights.”
As part of the deal, Tencent will also be able to increase its direct stake in Ubisoft from 4.5% to 9.99% of the capital or voting rights. However, it will not be able to sell its shares in the company for a period of at least five years, and will not be able to increase its stake in Ubisoft beyond 9.99% of the company’s capital and voting rights for a period of eight years.
The Guillemot family will retain control of Guillemot Brothers Limited and Tencent will not have any board representation or operational veto rights at Ubisoft. In addition, Tencent is providing Guillemot Brothers Limited with a long-term unsecured loan to refinance its debt and provide additional financial resources that can be used to acquire equity in Ubisoft.
The deal will see the expansion of the concert between the Guillemot family and Ubisoft to include Tencent. The expanded concert may increase its stake to 29.9% of Ubisoft’s capital or voting rights. Within this limit, Guillemot Brothers Limited and the Guillemot family may each increase their equity ownership in the video game company.
Ubisoft is a leading global video game company with a strong portfolio of assets, including a 17,000-strong creative and production team, structured around the “Lead & Associate” organization drawn from Ubisoft’s global network of studios, and a diverse portfolio of proprietary brands, including Assassin’s Creed, Far Cry, Skull and Bones, and Tom Clancy’s The Division. The company also has a strong track record of innovation, with a number of successful franchises and a deep pipeline of upcoming releases.
Tencent, one of China’s largest technology companies, is a major player in the global gaming industry and has a number of investments in major gaming companies, including Activision Blizzard, Epic Games, and PUBG Corporation.
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[…] the announcement that Tencent was acquiring a minority stake in Ubisoft, as well as providing a long-term unspecified loan, was made back in January 2023 it was hard not […]