Tencent Pursues Ubisoft In Bid To Become A Huge Gaming Giant

| August 4, 2022
Tencent Pursues Ubisoft, In Bid To Become A Huge Gaming Giant

The past few years have been lucrative for Chinese gaming giant Tencent, and reports suggest they’re looking for an even deeper stake in Ubisoft.

Earlier this week the huge gaming company was reported to be developing a cloud-based handheld console alongside Logitech. Now, according to Reuters, Tencent is looking to make another massive move by increasing their stake in Assassin’s Creed developer Ubisoft.

Tencent Pursues Ubisoft, In Bid To Become A Huge Gaming Giant 2

While it is no secret the colossal game developer has been on an absolute buying spree over the past decade, acquiring 1C Entertainment, Sumo (Sackboy), and a majority stake in Funcom, to name a few. This deal should come at no surprise since in 2018 they bought a 5% of Ubisoft to deter a Vivendi buyout.

While the Reuters report said “Tencent and Ubisoft declined to comment,” and “Representatives of the Guillemot family could not be immediately reached for comment,” ‘unnamed sources’ helped corroborate information regarding this potential next move.

“Tencent is very determined to nail down the deal as Ubisoft is such an important strategic asset for Tencent,” one of the people said.

At the top end of 100 euros per share, Tencent’s offer will be a premium of 127% to the stock’s 44 euros average price over the past three months, and is close to its historical price ceiling at 108 euros in 2018.

Tencent has submitted to the Guillemot family a term sheet – a non-binding offer describing the basic terms and conditions of an investment – with a price “way above” the company’s current price to ward off potential competition, one of the sources said.

The aggressive offer comes as global gaming power houses have been rushing to snap up quality independent game makers in recent years, which are in scarcity, two of the sources said.

Reuters
Tencent Pursues Ubisoft In Bid To Become A Huge Gaming Giant

While the sources being unnamed does cast a shadow of doubt on this news, there has been huge activity with game companies either merging or acquiring each other outright, while seeking the ability to remain independent, such as the recent Supermassive Games acquisition by Nordisk. If the past is any indicator, the previous deal that warded off Vivendi does lend credence to what the unnamed sources say.

However, much of this information should be taken with a grain of salt, as no formal announcement has been given thus far. It also remains unclear what a Tencent-controlled Ubisoft might look like, with its stable of prominent IPs like Far Cry, Watch Dogs, Tom Clancy, and Just Dance.

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