Ubisoft avoids takeover bid from France's Vivendi by switching to China's Tencent

Interstellar

Ubisoft is announcing today that French multimedia conglomerate Vivendi is selling all of its shares in the game maker. This ends Vivendi’s bid to takeover Ubisoft.

As part of this agreement, Vivendi will get 2 billion Euros (approximately $2.45 billion). That money will come from a variety of existing and new investors in Ubisoft. The publisher itself is buying back stocks, Ubisoft chief executive Yves Guillemot’s own Guillemot Brothers SE business is also acquiring some of the stock from Vivendi. New investors include the Ontario Teachers’ Pension Plan and Chinese multimedia internet conglomerate Tencent.

Vivendi purchased its Ubisoft shares for a total of 750 million Euros over the last several years, and this exit has netted it a huge profit. But Ubisoft is finally free from the Vivendi threat, so Guillemot is also happy.

Ubisoft plans to buy back shares from investors who want to sell for the same price as Vivendi.

A big part of this story is Tencent’s march toward acquiring more of the worldwide gaming industry. It already owns League of Legends creator Riot, it holds 48 percent of Unreal Engine and Fortnite developer Epic, and it acquired Clash of Clans studio Supercell for $8.6 billion in 2016.

Ubisoft is referring to Tencent as a “long-term” investor, and that is how it tends to handle these deals. As with other Chinese companies, Tencent prefers to acquire a minority share in a successful business so it can let the company continue to operate as it always has.

“The new strategic partnership agreement we signed [with Tencent] will enable Ubisoft to accelerate its development in China in the coming years and fully leverage a market with great potential,” said Guillemot.

And Ubisoft is in a strong position to benefit from Tencent. China is the biggest gaming market in the world in terms of spending, and it is also impenetrable due to burdensome regulations on foreign media and Tencent’s near monopoly on software distribution. To even get into the country, the Chinese government forces developers to get a domestic publishing partner as a sponsor.

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Replies • 8

WX-395

RockNRolla

A good defeat, which replenished their wallet

Kaddet

Interstellar

it's time Ubisoft to develop a new series

Sh4dowKill

Lunar

Yes the mobile game market in china is insane

i think this is caused by cheap android phones and the large population

C_RED

Effect

watch quietly

_TGSA_

Solar

Russia273 said:
I’d never even heard of Tencent a couple years ago, and now they’re suddenly everywhere. It’s kind of concerning if I’m being honest.

You're right. Tencent seems to have partnered with too many companies as of late. The fact that China restricts investments in the country and requires that outside companies partner with a local publisher has allowed it unfettered growth. The amount of control that Tencent will exert on these various companies in the next few years is starting to be quite worrisome.