To avoid a hostile takeover, Ubisoft opens its capital to Chinese Tencent

While rumors about a possible takeover of Ubisoft have been circulating for a few months, it is finally Tencent which invests in the holding company of the Guillemot brothers. The French company wants to eliminate any risk of a hostile takeover.

It’s a thunderclap in the world of video games. The holding Guillemot Brothers Limited, at the origin of the famous studio Ubisoft, has just seen the Chinese Tencent make an entry into the capital. Tencent now owns 49.9% of the founding brothers’ holding, which itself owns 13.6% of the game publisher’s capital. The Asian giant will however be limited to 5% of the voting rights of the holding company.

As part of this agreement, the Guillemot Brothers holding company has put in place a limitation which blocks the Chinese group from rising to a maximum of 9.99% of the capital of the daughter company Ubisoft in the next 8 years. Once this period has elapsed, however, Tencent will be able to take more important positions… and perhaps become the majority.

A changing video game market

This announcement comes a few months after that of the takeover of Activision-Blizzard by Microsoft against 69 billion dollars. More generally, the video game industry is consolidating around just a few players. Sony and Microsoft, but also Tencent, no longer hesitate to spend crazy sums to acquire prestigious studios.

That said, the Chinese have been preparing their arrival in French society for some time. In 2018, Tencent had already made a first entry into the capital. For Yves Guillemot, “This agreement allows us to have better control over the company and to decide our destiny. Governance is kept identical and does not change at any level. »

As the founder of Ubisoft explains, Tencent will not have a seat on the board of directors and Tencent will have to follow the decisions of the current management. But this position shows desires for long-term change. With this new participation, it further strengthens its place in the world of video games.

Tencent: bridging mobile games and consoles

Concentrated in the booming market for mobile games, Tencent wants to become a credible rival for the two big companies that dominate the world of consoles: Sony and Microsoft. It must be said that the video game market is, as a whole, in full expansion and there have been many takeovers lately.

Ubisoft was then a prime target for investors. The company has been in the throes of takeover rumors, as its stock price has fallen more than 45% in the past few years. With historical licenses like Assassin’s Creed or Prince of Persia, the French company had something to make you want and it is therefore Tencent, a partner for several years already, which is positioning itself as the best candidate for a long-term takeover.

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