Chinese tech and entertainment giant Tencent has announced its intention to buy UK work-for-hire developer Sumo Group.
The deal values Sumo at $1.27 billion, with Tencent forking out 513p per share. That's a 43 per cent increase on the 358p that the firm closed at on Friday, July 16th. The deal has not yet been approved by Sumo's board, though management has advised they accept the offer.
Tencent previously bought a stake in Sumo Group in November 2019. This deal comes in the wake of EA acquiring fellow British games firm Codemasters for $1.2 billion.
"The three founders of Sumo, who work in the business, Paul Porter, Darren Mills and I are passionate about what we do and are fully committed to continuing in our roles," said CEO Carl Cavers (pictured).
"The opportunity to work with Tencent is one we just couldn't miss. It would bring another dimension to Sumo, presenting opportunities for us to truly stamp our mark on this amazing industry, in ways which have previously been out-of-reach.
"Tencent has a strong track record for backing management teams and their existing strategies. Alongside the acceleration of own-IP work, Tencent has demonstrated its commitment to backing our client work and has stated its intention to ensure that we have the necessary investment to continue focusing on work with our key strategic partners on turn-key and co-development projects."
Tencent chief strategy officer James Mitchell added: "Tencent is proud to have been an investor in Sumo since 2019, and we view the proposed combination as an evolution of our partnership. Tencent is a committed investor in the game industry, with a track record of supporting the growth of game studios around the world. We hold Sumo's team and the games they produce in high regard, and its strategy and spirit of innovation have underpinned the success of the business over many years.
"Tencent intends to bring its expertise and resources to accelerate the growth of Sumo both in the UK and abroad, supporting Sumo in the market for top-notch creative talent, and the UK as a hub for game innovation. We believe the proposed transaction benefits all stakeholders, delivers compelling value for Sumo shareholders, while enhancing the Sumo business for the future."