Tencent are working in concert with Ubisoft’s founding family after €300m investment
Tencent now hold almost half of Guillemot Brothers, the largest stakeholders in Ubisoft
Chinese media giants Tencent have invested €300 million (£260 million) in the company operated by Ubisoft’s founding family, the Guillemots. The deal will see Tencent bring some of Ubisoft’s most well known game series to mobile, and to PC in China. Tencent’s investment in Guillemot Brothers Limited follows speculation last month that they were looking to take out a bigger stake in Ubisoft, even becoming the single largest shareholders.
Ubisoft’s CEO Yves Guillemot said the investment by Tencent would provide “stability essential for its long-term development”. Along with the €300 million, which is made up of €200 million in shares and a €100 million capital increase, Tencent are giving Ubisoft a long-term unsecured loan to refinance their debt. The Chinese company are also providing “additional financial resources that can be used to acquire equity” in the French publishers.
The deal between Guillemot Brothers and Tencent is described as the companies entering “into concert” together. Although they’re investing heavily in Guillemot Brothers, Tencent won’t have any positions on the company’s board of directors. Neither will they have consent or veto over what Guillemot Brothers does, nor any operational rights over Ubisoft.
Tencent now holds a 49.9% stake in Guillemot Brothers, and that expanded concert means the Guillemots can increase their stake in Ubisoft to 29.9% of capital or voting rights. Ubisoft’s board have allowed Tencent to more than double their direct stake to 9.99%, with a block on Tencent selling their shares in place for five years. Tencent won’t be allowed to increase their stake in Ubisoft for another eight years.
Ubisoft and Tencent's partnership seems a little different from the attempted takeover of Ubisoft by Vivendi that, in the end, didn't go down a few years back. Vivendi failed to snap up the necessary 30% of shares required to force Ubisoft into asking them to submit a takeover bid, and so Vivendi sold off their shares. That's how Tencent acquired theirs in the first place, although they're way off the necessary slice of Ubi pie they'd need to strongarm the Guillemots into selling the company.
Hey, it’s more consolidation in the games industry folks. Sort of, anyway. You can read the full statement from Ubisoft and Tencent here.