According to Reuters, Tencent, a Chinese gaming behemoth, has purchased a 49.9 percent share in Guillemot Brothers Limited, the parent company of Ubisoft, as well as a 5 percent voting share in the company.
Tencent previously owned a 4.5 percent share in Ubisoft, and the company now has far more control behind the scenes as the French publishers prepare for their next big game announcements. As a result of the agreement, Tencent may increase its interest in Ubisoft to 9.99 percent.
According to Reuters, Ubisoft has a new owner, but the company does have a significant shake-up in the composition of its investments and how it relates to the Guillemot family, who founded Ubisoft in the 1980s. Tencent, a Chinese gaming company, has reportedly purchased a 49.9 percent share in Guillemot Brothers Limited, as well as a five percent voting share in the company.
Tencent is significantly overpaying the Guillemot family based on Ubisofts current stock value, according to raw numbers. Its a move that indicates Tencent's intention to make Ubisoft a key component of their international strategy and follows a pattern of massive mergers and acquisitions in the video game industry over the past few months.
The family's decision is undoubtedly part of their strategy and desire to maintain full control over the business, which has been subject to many takeover attempts in the past few years. Ubisoft also announced a long-term unsecured loan to repay its debt and provide additional financial resources to purchase equity in Ubisoft.
While the move provides a significant amount of cash for Ubisoft and the Guillemot family to work with, it also strengthens Tencent as a more permanent partner in Ubisoft's controlling interests. Any plans to modify the stock from today's news will have to wait.
Tencent cannot sell its Ubisoft shares for five years (and must even then give the Guillemot family priority on buying those shares if they choose to sell), and cannot increase its Ubisoft stake further than 9.99 percent for eight years.