Supercell takeover propels Tencent into entertainment super league
Chinese internet giant now forecast to seize 13 per cent of the US$99.6-billion global games market this year
Tencent Holdings has taken a major step towards becoming a global entertainment powerhouse, after its blockbuster acquisition of Finnish mobile game developer Supercell, analysts say.
The Shenzhen-based internet giant said on Tuesday it had agreed to lead a consortium to buy up to 84.3 per cent of Supercell, for US$8.6 billion.
“We see the deal as helping Tencent accelerate its efforts to develop a global entertainment business spanning different media formats, including movies,” said Ricky Lai, a research analyst at Guotai Junan International, on Wednesday.
The purchase — from majority owner SoftBank Group Corp, and certain Supercell shareholders — follows Tencent’s participation earlier this month in a new joint venture with private equity firms Sequoia Capital China and FountainVest Partners to accelerate the mainland expansion of WME-IMG, the world’s largest entertainment, sports and media agency.
The company’s recent deals represent a longstanding strategy by Tencent to expand its media and entertainment relationships, as well as build up its war chest of valuable entertainment content, according to Lai.
Tencent chairman and chief executive Pony Ma Huateng told a press briefing with Chinese media in March that his firm was well-positioned to accomplish that goal.