Tencent appears to be doubling down on its investment in Ubisoft. Although he already owns 5 percent of the assassin’s Creed editor, Reuters now reports the Chinese mega-conglomerate with huge investments throughout the gaming industry has its sights set on becoming Ubisoft’s largest shareholder. Your plan to achieve that? Pay double what the shares are worth and buy them directly from the Guillemot family.
“Tencent is very determined to close the deal as Ubisoft is such an important strategic asset for Tencent,” a source said. Reuters. Tencent and Ubisoft have already partnered to bring the latter’s games to China, and the goal of this new deal would reportedly be to help Tencent pivot to bring its games to a global audience. has also been more than a year since the company received a new license to release a game in China.
Kotaku previously reported that sources suggested Ubisoft CEO Yves Guillemot I was looking for an exit ramp amid recent turmoil and departures at the company. some meold companions are gone or were forced to resign, and Guillemot himself son Charlie, moved last year to co-found a fantasy sports NFT startup. An agreement like this would be a way to ease the transition.
For that to happen, Reuters reports that Tencent is willing to pay up to nearly $104 per share, more than double what Ubisoft shares are currently worth. Some of those shares would come directly from the Guillemot family, which founded Ubisoft in 1986 and currently owns roughly 15 percent. Others would come from the rest of the public who own about 80 percent. Tencent already owns 5 percent of the company, but would need to increase that stake substantially to overtake the Guillemot family as its largest single shareholder.
Tencent’s current 5 percent stake came as part of a 2018 deal in which it helped the publisher fend off a hostile takeover attempt by French media conglomerate Vivendi. At that time, Tencent was prohibited from increasing its ownership. However, that limitation expired earlier this year. Reuters reports that Tencent executives visited the Guillemot family in May to outline what a possible deal would look like. Bloomberg previously reported in April that private equity firms they were also interested in Ubisoftwhich helped drive up the stock price at the time.
All of these moves come in the wake of a frenzy of mergers and acquisitions in the video game space. Microsoft proposed to buy Activision Blizzard for $69 billion in January. sony bought Destiny 2 manufacturer Bungie for more than $3.6 billion soon after. And Take-Two bought Zynga for $12.7 billion.
The round robin consolidation has left many wondering who will be next, and Ubisoft was the prime suspect. It has a deep catalog of major franchises, including assassin’s Creed, Very farY rainbow six, but is also struggling lately to meet some of them. Delays, flops, and turnover among many senior teams have left Ubisoft with a relatively anemic project slate over the next year. And due to global market conditions, Yves Guillemot recently encouraged staff in an email to cut costs wherever possible.
Tencent has also run into trouble recently, most notably in the Chinese domestic market, where regulatory hurdles stalled new launches. The conglomerate lost tens of billions in the process, with the freeze on new approvals just beginning to thaw at the beginning of this yearthough not for Tencent.
Ubisoft would be far from Tencent’s only big investment in the global gaming space. In addition to its own studios in North America and elsewhere, the conglomerate has continued snatching smaller studios even faster than competitors like Microsoft and Embracer Group. For now, though, it’s still only the world’s second-largest gaming company behind Sony.
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