Chinese tech and entertainment giant Tencent has increased its stake in Ubisoft.
The company has entered into an agreement to buy 49.9 per cent of Guillemot Brothers Limited for a cool €300 million ($297 million). Of that figure, €200 million was acquiring shares, while another €100 million was a capital raise. This deal values Ubisoft at €80 billion.
Guillemot Brothers Limited owned 12.8 per cent of Ubisoft's shares before this deal and 16.7 per cent of the company's voting rights. Tencent's investment brings these up to 13.6 per cent and 17.6 per cent respectively.
In doing so, Tencent is joining the Guillemot family concert – a group of companies that includes Guillemot Brothers Ltd, the Guillemot Family and Guillemot Corporation SA – that can own 29.9 per cent of Ubisoft voting rights. When this deal is completed, the Guillemot family concert will own 24.9 per cent of Ubisoft, up from 21.4 per cent.
After the deal, Tencent will not hold any board seats. The company previously owned 4.5 per cent of Ubisoft shares and 4.1 per cent voting rights, slightly lower than the five per cent slice that it acquired back in 2018. As part of this deal, Tencent has been given the right to more than double its stake to 9.9 per cent though it will not be able to increase its slice of Ubisoft for the next eight years. It's also unable to sell its stake for the next five years, and even then it has to give the Guillemot family first right of refusal.
“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," Ubisoft CEO and co-founder Yves Guillemot (pictured) said.
“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. 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.”
Tencent president Martin Lau added: “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."
This follows reports that Tencent was looking to increase its stake in Ubisoft earlier this year.
Disclaimer: Alex Calvin is a freelance writer who has worked with Ubisoft in the past.