Tencent buys UK games company Sumo for £ 919million
Tencent has signed a £ 919million deal to acquire UK game developer Sumo Group. Indeed, Chinese tech companies have been acquiring international games for many years.
Founded in Yorkshire in 2003, Sumo develops games for Sony, Microsoft and Sega. Forza, Hitman, Sonic And Little big planet Franchise.
Integration is accelerating in the video game industry as console-focused publishers take mobile app developers by storm and owners of large platforms seek to protect their proprietary content.
Tencent’s cash offer of 513 pence per share through its subsidiary Sixjoy Hong Kong will be offered at a premium of 43% over Friday’s closing price. Sumo shares jumped to 508p in a first trade Monday morning in London.
“Sumo’s Board of Directors strongly believes that companies will benefit from Tencent’s vast video game ecosystem, proven industry expertise and strategic resources,” said the President of Sumo UK Games. said veteran Ian Livingstone.
With shareholder approval, the deal is another example of a foreign buyer taking over part of Britain’s thriving game development industry after the £ 945million closing of Electronic Arts, based in California. Will be. Acquisition of Codemasters in February.
Shenzhen-based WeChat owner Tencent acquired a minority stake in Sumo in November 2019 and now represents 8.75% of the company. The games company’s portfolio already includes Finnish manufacturer Supercell. Clash of the clans, And based in the United States League of Legends Developer Riot Games, and Activision Blizzard, Epic Games, Voodoo, Frontier Developments and Ubisoft.
Sumo’s move comes when regulators in the world’s two largest gaming markets, the United States and China, cut back on Tencent’s investments and acquisitions. In-depth investigation As part of a broad crackdown on foreign trade between Big Tech and Chinese companies.
Sumo was launched at Aim in London in 2017 at 100 pence a share, just over a year after its acquisition by private equity fund Perwyn. The company has 1,200 employees in 14 studios in five countries, including India, Poland and the United Kingdom.
Perwyn, who owns around 17% of sumo, said he would recommend Tencent’s offer.
Sumo’s share price has more than doubled since the start of the pandemic, as the blockade gave the gaming industry a widespread boost ahead of its announcement on Monday.
However, this year’s share has only grown by 7% so far, and the game’s growth appears to be slowing as the blockade is lifted. Last week, figures from the NPD Group showed that overall consumer video game spending in the United States grew 15% year-on-year in the first half of 2021, but increased 27% year-on-year in 2020 to reach only 1% per capita. It was an increase. June 2021 software and content sales pennies.
Goldman Sachs and Zeus Capital advised Sumo on the transaction.
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