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Embracer Group to split into three gaming companies

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Apr 22, 2024
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Illustration: Eniola Odetunde/Axios

Swedish gaming group Embracer announced Monday that it plans to split into three separate listed companies and that it has secured new financing.

Why it matters: The moves alleviates its debt and struggling stock price after a failed $2 billion deal with Saudi-funded Savvy Games.

Zoom in: Embracer said the three companies will be Asmodee Group (tabletop games publisher and distributor), Coffee Stain & Friends (indie, mid-market and free-to-play games), and Middle-earth Enterprises & Friends (top game developer, owning The Lord of the Rings, Tomb Raider and other IP).

  • Embracer, which trades on Nasdaq Stockholm, will be renamed Middle-earth Enterprises & Friends.
  • Asmodee and Coffee Stain & Friends will spinoff within the next 12 months and sometime in 2025, respectively, and shares will be distributed as a divided to Embracer shareholders.
  • Embracer secured a €900 million loan from JP Morgan, BNP Paribas, SEB, Societe Generale and Swedbank with a maturity of 18 months. The company said, in a separate press release, that it will be used to repay existing debt and reduce leverage.

Flashback: Embracer acquired 22 studios in 2021, making it the most active video game acquirer. But in recent months, it's been in cost-cutting mode — shutting down studios, canceling games and laying off staffers.

  • Embracer also agreed to sell Borderlands developer Gearbox to Take-Two for a fraction of the value it paid. It purchased Gearbox for $1.3 billion in 2021 and agreed to sell last month for $460 million.
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