Tencent wants to acquire the majority stake in Ubisoft

The Chinese gaming and social media giant wants to expand globally.
Tencent and Ubisoft company logos

China’s largest gaming entity Tencent wants to buy more stakes in French video game developer and publisher Ubisoft and become the company’s biggest shareholder. Tencent acquired 5.6 million shares of Ubisoft (approximately 5% of all shares) —most of it from Vivendi— back in 2018, and now the Chinese firm is looking to invest further.

Sources with direct knowledge of the matter told Reuters that the tech giant plans to increase its stake in Ubisoft as the Chinese gaming giant pivots towards the global market. Tencent has been having a hard time in China due to the country’s gaming regulator NPPA denying new game licenses to the company time after time. Tencent has been expanding globally lately and the company re-released (closed beta currently) its highly popular mobile MOBA Honor of Kings worldwide.

Related: Ubisoft is making a new Assassin’s Creed mobile game

In an effort to continue its growth globally, “Tencent has reached out to the French firm’s founding Guillemot family and expressed interest in increasing its stake in the firm.” said Reuters’ exclusive piece. The same sources also claimed Tencent wants to have the majority stake in the French video games firm.

Tencent paid €66 per share when it purchased Ubisoft’s shares back in 2018, but this time around, the company is willing to pay up to €100 per share in order to have the majority stake. The rumors alone made Ubisoft’s shares surge, but there’s nothing concrete as of yet.

Ubisoft’s current financial state

Ubisoft logo with share values going down in the background

The French game maker’s Q1 2022 financial report showed a steep decline year-over-year due to multiple games and in-game content delays. The company had to shut down four video game projects and delayed two more, however, it’s expecting a strong financial period starting this fall.

The Assassin’s Creed makers’ shares were also down by %26 percent when the report was released. However, Ubisoft will reveal trailers and gameplay videos for a number of forthcoming titles starting this September and may reveal more about the upcoming The Division mobile game.

Moreover, Massive Entertainment —one of Ubisoft’s subsidiaries and makers of The Division— is working on an untitled Star Wars game, which can help the company’s shares recover in the long run.

Is this a new “Ubisoft vs. Vivendi”?

All Assassin's Creed main heroes in a single picture

Yves Guillemot, the CEO and one of the co-founders of Ubisoft, is no stranger to takeovers or major companies trying to purchase the majority of stakes, but this time around the story reads a little different.

The French mass media company Vivendi tried to take over Ubisoft between 2015 to 2018 against the Guillemot family’s will. Vivendi even acquired more than 30% of the company’s shares at one point, but after a lengthy fight, Guillemots reached an agreement with Vivendi to end the potential takeover for good; by March 2019, Vivendi completely relieved all the shares it owned in Ubisoft.

This is also when Tencent bought about %5 of Ubisoft’s shares, also announcing a partnership with Ubisoft to bring their titles into the Chinese video games market.

Reuters’ sources say there’s no hostility this time, as Tencent reached the Guillemot family rather than going for an aggressive takeover; plus, the Chinese giant is already partnered with Ubisoft. On top of that, Ubisoft shareholders are more open to selling their stakes this time, provided the offer is satisfying enough.

Keep in mind that this is still a reliable rumor at best and must be taken with a grain of salt.

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