$2 billion partnership deal falls through for Embracer Group

• Shares of Embracer Group were down more than 40% this morning.

Details: "All documentation was finalized and ready to go as of yesterday," Embracer CEO Lars Wingefors told investors Wednesday morning. "We asked for the execution of the agreement before our Q4 announcement. However late last night we received a negative outcome from the counterparty."

• Compounding the bad news, the company lowered its earnings forecast for the next year, citing game delays, from a range of $965 million - $1.3 billion down to $655 million - $840 million.

Catch up fast: Embracer has been a voracious purchaser of games, game studios and intellectual property, making more than 20 acquisition deals last year, valued at over $1 billion, according to a Drake Star report.

• Embracer's portfolio includes rights to "The Lord of the Rings" and both the characters and studios tied to the Tomb Raider franchise.

• The company also accepted a $1 billion investment from the Saudi-government-funded Savvy Games Group last year.

What they're saying: "It's been a rough night," Wingefors said in a livestream today.

• "But, hey, this is business."
• Asked if the negative outcome was the last word on the partnership, Wingefors said the message Embracer got from the would-be partner was that the deal "made perfect sense, so it was other decisions impacting them than the agreement itself."

Sign up for the Axios Gaming newsletter here.