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Tencent ups stake in France's Ubisoft to boost overseas gaming presence 2022-09-09
Tencent Ups Stake in France's Ubisoft to Boost Overseas Gaming Presence
Tencent Holdings, the world’s biggest video game company, has increased its shareholding in French gaming giant Ubisoft Entertainment to expand its footprint in the international gaming market and counter sliding revenue at home.
Tencent has acquired 49.9 percent of the equity held by Ubisoft’s biggest shareholder, Guillemot Brothers, for EUR300 million (USD299.6 million), and in this way has increased its stake in the French gaming firm to 9.99 percent, Ubisoft said on Sept. 6.
It works out at an implicit transaction price of EUR80 (USD79.90) per share in Ubisoft, which is a high range in the company’s historical stock price, and it gives Tencent 5 percent voting rights in Guillemot Brothers, which is run by the co-founder of Ubisoft, Yves Guillemot.
However, the purchase comes with a number of caveats. There will be no changes to Ubisoft’s management team, Tencent will not hold any executive positions in the Saint-Mande-based firm and will have no veto power over any commercial operations. Shenzhen-based Tencent may also not sell the shares for five years.
But the deal will allow Tencent to introduce several of Ubisoft’s top computer games into the Chinese market and to help to bring a number of Ubisoft’s most popular products, such as Assassin’s Creed, The Division and Tom Clancy's Rainbow Six® Siege, onto mobile platforms.
Ubisoft has a very good record in creating world-class entertainment products, and Tencent looks forward to bringing more Ubisoft AAA products to mobile platforms through the upcoming cooperation, Tencent President Martin Lau said.
Further partnership with Tencent will facilitate Ubisoft’s long-term development and give it needed stability, said Guillemot, who is also chief executive officer at Ubisoft.
It is not the first tie-up between the two parties. Tencent bought a 5 percent stake in Ubisoft in 2018 to help it get rid of a hostile takeover by French mass media firm Vivendi. And last year it obtained exclusive rights to Ubisoft’s game Tom Clancy’s The Division 2 in China.
Tencent has been more aggressively expanding its reach beyond China recently to stave off downward pressure in the domestic gaming market. Both its China and overseas revenue dipped 1 percent in the second quarter from the same period last year to CNY31.8 billion (USD4.57 billion) and CNY10.7 billion respectively.
Last week unit SixJoy said it will pay CNY19.5 billion (USD135 million) to buy a 16.2 percent stake in FromSoftware, a subsidiary of Japan’s Kadokawa Group and developer of the game Elden Ring, to become its second-largest shareholder.
Source: Yicai
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