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Tencent is investing €300 million ($297m USD) in Ubisoft family holding company Guillemot Brothers Limited. The Chinese tech giant is also increasing its direct stake in the company from 4.5% to 9.99% amid rumors of a Ubisoft buyout.
The elaborate transaction also includes money Tencent is giving Guillemot Brothers Limited to refinance its debt and "provide additional financial resources that can be used to acquire equity in Ubisoft."
With its investment at $80 a share, Tencent has secured a 49.9% economic stake in Guillemot Brothers Limited, but the companies have made clear that this isn't a takeover. The Guillemot family will remain the sole owners of the Assassin's Creed maker, with Tencent now having 5% voting rights.
Article continues belowThis comes just a few months after reports surfaced claiming several private equity firms had expressed interest in buying Ubisoft outright. At the time, Ubisoft itself commented that the buyout rumors proved its "appeal and value," something Guillemot echoed in his statement on today's news.
"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," says Ubisoft CEO Yves Guillemot. "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."
"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," says Tencent president Martin Lau. "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."
Included in the deal are terms that say Tencent can't further increase its Ubisoft stake for eight years and can't sell its shares for five years. And if it does end up selling shares, it'll give the Guillemot family the chance to buy them back first.
