Ubisoft in the sights of Tencent: it can become the majority shareholder

Ubisoft in the sights of Tencent: it can become the majority shareholder

Ubisoft in the sights of Tencent

Tencent continues to invest in the Western video game market and does so by targeting Ubisoft. The French Canadian publisher and developer is known for making the Assassin's Creed series, Splinter Cell and many others, and it is not the first time that the Chinese giant decides to invest in the publisher and development team, but this time (according to to a Reuters report) the takeover would be decidedly more aggressive.

In 2018, Tencent acquired about 5% of the shares of Ubisoft. Now, however, the Chinese company has decided to invest even more and obviously aims to become the majority shareholder. The news reached Reuters from some sources who are aware of the upcoming market maneuvers of the Chinese giant. Currently the value of the European and US publisher and developer is around 5.3 billion and it is not clear how much one would have to invest to become the majority shareholder.

At the moment, the information is still to be verified, but various realities outside Europe and the United States of America have already been interested in investing in some Western companies and beyond. In addition to Tencent, the Saudi public investment fund has already acquired stakes in several development studios and publishers: among these we find stakes in SNK, Nintendo and Capcom. Keep following geekinco for all the news and announcements in the pipeline from the world of video games.

Tencent makes megabucks offer to buy majority stake in Ubisoft

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A Reuters report (opens in new tab) says Tencent, China's largest tech company and an absolute gaming behemoth, has its sights set on Ubisoft. Tencent already has a 5% stake in Ubisoft, acquired in 2018, and is apparently looking to gobble up some of the 16% stake held by the Guillemot family, who co-founded and still run the business. Tencent's goal is to become the single largest shareholder in the publisher.

Ubisoft is currently valued at around $5.3 billion, and Tencent is looking to buy at a price of $101.84 per share (its 2018 stake was bought at roughly $67 dollars per share). This is a massive offer: Ubisoft's stock price has averaged around $45 per share so far this year, while its highest-ever valuation was around $110 in 2018.

80% of Ubisoft is publicly owned, and Tencent is also looking to acquire shares from elsewhere as well as the Guillemots. With an offer price like that, it probably won't be hard.

Ubisoft shares went up 15% following Reuters report about Tencent, which certainly shows that shareholders like the sound of money, while the Guillemot family company (which holds their shares) also rose 7% in value. It's unclear how far along any projected deal is, with Reuters' sources (opens in new tab) saying no deal is finalised, though Tencent executives met the Guillemots in May and have submitted an offer with the company's high price. 

Neither Tencent nor Ubisoft has commented on the report. One insider did say: 'Tencent is very determined to nail down the deal as Ubisoft is such an important strategic asset for Tencent'.

Tencent's holdings are legion and, while China is in the midst of a giant tech crackdown (opens in new tab), it's looking to increase its international appeal. It already has stakes in the likes of Epic Games, Riot, Supercell, and Frontier, while outright acquiring studios including Sumo, Turtle Rock, Playtonic, and Digital Extremes. It's actually pretty dizzying just how much of the gaming industry Tencent owns (opens in new tab).

This is not a done deal: the Guillemot family has previously shown it wants to retain control of Ubisoft, and most notably fought off a takeover from Vivendi (which eventually sold all of its acquired shares back to the publisher). The Guillemots managed to fight Vivendi off at the time thanks to investments from, among others, Tencent: oops!

Rich is a games journalist with 15 years' experience, beginning his career on Edge magazine before working for a wide range of outlets, including Ars Technica, Eurogamer, GamesRadar+, Gamespot, the Guardian, IGN, the New Statesman, Polygon, and Vice. He was the editor of Kotaku UK, the UK arm of Kotaku, for three years before joining PC Gamer. He is the author of a Brief History of Video Games, a full history of the medium, which the Midwest Book Review described as '[a] must-read for serious minded game historians and curious video game connoisseurs alike.'