BRIEF: Tencent invests in major new Ubisoft unit

French video game developer Ubisoft (UBSFY.US; UBI.PA) on Thursday announced its establishment of a major new gaming-focused subsidiary, with Tencent Holdings Ltd. (0700.HK)investing 1.16 billion euros ($1.25 billion) for a 25% stake.

The new entity will hold the rights and development teams for several of Ubisoft’s flagship franchises, including “Assassin’s Creed,” “Far Cry” and “Tom Clancy’s Rainbow Six,” according to Ubisoft. The unit’s valuation of about 4 billion euros is larger than Ubisoft’s own market cap, which currently stands at about 1.9 billion euros. The deal is expected to close by the end of 2025.

“Creating a dedicated subsidiary to lead the development of our three core franchises and bringing Tencent on board as a minority investor allows us to unlock asset value, strengthen our balance sheet, and set the stage for long-term growth and success,” said Ubisoft CEO Yves Guillemot.

Speaking about the latest partnership, Tencent President Martin Lau said: “We see great potential for these franchises to evolve into evergreen platforms and deliver compelling new experiences for gamers.”

Tencent already owns 9.2% of Ubisoft, and reports last October suggested the Chinese company was considering a full acquisition. Tencent shares opened 0.49% higher on Friday in Hong Kong and closed down 0.2% at HK$508 by the midday break.

By Lee Shih Ta

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