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Tencent increases stake in Ubisoft

Sep 7, 2022
Illustration of a hundred dollar bill as a video game controller.

Illustration: Aïda Amer/Axios

Tencent has invested about $298 million in Ubisoft, the French video game publisher behind the Assassin's Creed franchise.

Why it matters: Amid a wave of consolidation in gaming and as Ubisoft's stock price has struggled over the past year, the publisher has been viewed as a potential takeover target. Now this investment could delay any offers.

What the CFO is saying: "If someone wants to make a bid for the whole of Ubisoft, it still can, and the bid will be reviewed by our board," CFO Frederick Duguet told Bloomberg Tuesday.

Details: But this deal is not a takeover. As Axios Gaming author Stephen Totilo tweeted Tuesday, "Tencent is NOT buying Ubisoft."

  • Per the press release, Tencent made the investment by buying a 49.9% stake in Guillemot Brothers, Ubisoft's largest shareholder, which is run by its co-founders.
  • The deal only gives Tencent 5% voting rights, however.
  • Tencent cannot sell its Ubisoft shares for five years. It also cannot increase its stake beyond 9.99% of Ubisoft's capital and voting rights for eight years.

Flashback: Tencent helped Ubisoft fend off a takeover bid from Vivendi in 2018. It had acquired a 5% stake in Ubisoft and agreed to bring Ubisoft's games to China.

What's next: Both Ubisoft and Tencent have reported revenue declines and enacted cost-cutting measures. This deal aims to help each of their fortunes by bringing Ubisoft's games to mobile.

  • Ubisoft has an event this Saturday to share updates on its upcoming games, including Assassin's Creed.
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