the Guillemot family strengthens within Ubisoft by joining forces with Chinese Tencent

by time news

Tencent is investing 300 million euros in the family holding Guillemot Brothers and will not be able to hold more than 9.99% of Ubisoft for eight years.

The summer rumors were correct. As announced by Reuters in early August, the French video game giant Ubisoft has opened up the capital of its controlling holding company, Guillemot Brothers, to the Chinese group Tencent. But there is no question of changing the governance of this major player in gaming.

This investment, which amounts to 300 million euros, remains in effect a minority (49.9%). “Tencent will not be represented on the board and will have no approval or operational veto rights.“, underlines Ubisoft in a press release. The Guillemot brothers therefore still hold the reins of the company they founded in the 1980s.

However, the agreement between the Guillemot family and Tencent gives the latter the right to increase its direct stake in Ubisoft. The Chinese group, which entered the capital of the French company when Vivendi withdrew from it in 2018, held 4.5%. It can now go up to 9.99%. But Ubisoft management has added binding clauses.

This maximum threshold of 9.99% will be frozen for eight years. And these shares cannot be resold for 5 years, the Guillemot family having priority to buy them back.

Protect yourself from a hostile operation

«This deal aligns with our philosophy of investing alongside creative founders, fully confident that they will take their businesses to new heights. “comments Martin Lau, president of Tencent. The Chinese group, world leader in video games, owns the American company Riot Games (League of Legends) and mobile gaming giant Supercell (Clash Royale). But it has also taken minority stakes in a myriad of Western video game players.

This reinforced partnership is announced at a time when the video game sector is in full consolidation. The Activision-Blizzard giant is about to be swallowed up by Microsoft, and EA is said to have had discussions with Amazon. Sony has acquired several development studios, while the French Quantic Dream was bought by the Chinese group NetEase.

Ubisoft, its rich catalog of licenses and its market valuation of 5.5 billion euros, was also seen as an attractive target for a takeover. This agreement with Tencent allows it to protect itself from a hostile takeover. The holding company, reinforced by its Chinese ally, now holds 24.5% of the voting rights and 19.8% of the capital.

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