Tencent increases its stake in Assassin’s Creed maker Ubisoft

Chinese tech giant Tencent Holdings is increasing its minority stake in Ubisoft in a deal with the company’s founding family that values France’s biggest video game maker at more than €10 billion (US$9.88 billion) amid a wave of buyouts in the industry.

The deal underscores the appetite of deep-pocketed Chinese gaming giants for foreign studios and comes just a week after the acquisition by NetEase of unlisted French video games maker Quantic Dream.

It also caps a difficult four-year period at Ubisoft, home to the Assassin’s Creed and Tom Clancy’s video game franchises, marked by a succession of delays of new video games and allegations of sexual harassment that led to a revamp of its top management. Ubisoft’s share price has fallen by more than half over the period, from about €100 to less than €44 on Tuesday.

The transaction makes Tencent part of a shareholder pact with Ubisoft’s founders, the Guillemots, and gives it a total stake in the video game maker of more than 11 per cent through the acquisition of a stake in the family holding.

This includes the acquisition by Tencent of a 49.9 per cent stake with 5 per cent voting rights in Guillemot Brothers Limited, Ubisoft said in a statement.

Tencent’s investment in Guillemot Brothers Limited, which owns the bulk of the family’s 15 per cent stake in Ubisoft, amounts to €300 million, at an implied valuation of €80 per Ubisoft share. That values Ubisoft at more than €10 billion.

China’s largest social network and gaming firm also has the right to raise its direct stake in Ubisoft to 9.99 per cent from 4.5 per cent currently, said Ubisoft.