Embracer Group announced the conclusion of its restructuring process following the sale of Gearbox Entertainment Company to Take-Two Interactive earlier today. CEO Lars Wingefors confirmed the conclusion of the restructuring during an investor call regarding the divestment. However, when questioned about potential plans to resume acquiring other studios, Wingefors said it was premature to restart merger and acquisition activities.
Wingefors highlighted that while Embracer receives weekly inquiries from companies interested in acquiring certain assets within the group, he emphasized that these assets are not for sale. He explained that divesting from certain businesses with negative cash flow would enhance the cash flow generation of the remaining Embracer entities.
Despite the conclusion of the restructuring program, Wingefors expressed caution about resuming previous merger and acquisition strategies. He emphasized the current focus on optimizing the group’s structure, leveraging existing assets, and enhancing profitability and cash flow through improved product development and collaboration among group entities.
As of early 2023, Embracer Group owned 138 studios, including prominent names like Crystal Dynamics, Eidos Montreal, and Volition. However, over the past year, several changes occurred within the group, including the split of Saber Interactive into a separate company, the closure of Free Radical Volition, and employee layoffs.
Embracer’s decision not to pursue mergers and acquisitions contrasts with its previous rapid expansion strategy. However, the group’s cautious approach suggests focusing on internal optimization rather than further external growth initiatives.
