This is intriguing information.
Tencent has acquired a minority stake in Guillemot Brothers Limited and has entered into a collaboration with the company's founders, according to Ubisoft.
"The expansion of the collaboration with Tencent reinforces Ubisoft's core shareholding around its founders and provides the company with the stability required for long-term development," said Yves Guillemot, CEO and Co-Founder, Ubisoft.
"In a world where platforms and business models are merging, this transaction validates our strategy and highlights the strong intrinsic value of the assets we've built over time, which is fantastic news for our teams, gamers, and shareholders." Tencent is a significant shareholder partner for many of the industry's leaders who have created some of the best video games. This transaction strengthens our ability to create significant value in the coming years."
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"The team at Ubisoft has demonstrated an impressive ability to consistently create world-class entertainment, as well as a diverse portfolio of brands that includes some of the industry's most successful franchises," said Tencent President Martin Lau. "As Ubisoft continues to develop immersive game experiences and bring some of Ubisoft's most well-known AAA franchises to mobile, we are excited to expand our engagement with the founders, the Guillemot family." This agreement also aligns with our philosophy of investing alongside creative founders with complete confidence in their ability to lead their companies to new heights."
Transaction details
Tencent acquires a 49.9% economic stake with 5% voting rights in Guillemot Brothers Limited
Tencent has invested €300 million in Guillemot Brothers Limited (€200 million in share acquisition and €100 million in capital increase), implying an implied valuation for Ubisoft of €80 per share.
Furthermore, Tencent is providing Guillemot Brothers Limited with a long-term unsecured loan to refinance its debt and provide additional financial resources for the acquisition of equity in Ubisoft.
Guillemot Brothers Limited is still solely owned by the Guillemot family. Tencent will not be represented on its Board of Directors and will have no consent or veto power over the company.
Tencent has joined the Guillemot family concert in support of Ubisoft.
The expanded concert could give it 29.9% of Ubisoft's capital or voting rights. Guillemot Brothers Limited and the Guillemot family may each increase their equity ownership in Ubisoft within this limit. Furthermore, Tencent has been authorised by Ubisoft's Board of Directors to increase its direct stake in Ubisoft from 4.5% to 9.99% of the capital or voting rights. Tencent will be unable to sell its shares in Ubisoft for 5 years (anything beyond that will give the Guillemot family a right of priority) and will be unable to increase its stake in Ubisoft beyond 9.99% of Ubisoft's capital and voting rights for an additional 8 years.
Ubisoft's governance will remain unchanged as a result of this transaction, and Tencent will have no operational veto rights.