Chinese multinational technology and entertainment conglomerate Tencent has increased its stake in French gaming firm Ubisoft to 9.99 percent from 4.5 percent.

Ubisoft said in a statement on Tuesday that Tencent is paying €300 million ($297.19 million), including €200 million ($198.13 million) share acquisition and €100 million ($99.06 million) capital increase, to Guillemot Brothers for a 49.9 percent stake, at an implied valuation for Ubisoft of €80 ($79.25) per share.

Guillemot Brothers is a major shareholder of Ubisoft who owned 15 percent stake in the company.

In addition, Tencent is providing Guillemot Brothers with a long-term unsecured loan to refinance its debt and provide additional financial resources that can be used to acquire equity in Ubisoft.

Guillemot Brothers remains exclusively controlled by the Guillemot family. Tencent will not be represented on its Board of Directors and will not obtain any consent or veto rights over the business.

The Guillemot family concert with respect to Ubisoft is extended to include Tencent.

The expanded concert may increase its stake to 29.9 percent of Ubisoft’s capital or voting rights.

Within this limit, Guillemot Brothers and the Guillemot family may each increase their equity ownership in Ubisoft.

Additionally, Ubisoft’s board of directors has authorized Tencent to increase its direct stake in Ubisoft from 4.5 percent to 9.99 percent of the capital or voting rights.

Tencent will not be able to sell its shares in Ubisoft for a period of five years (and beyond will give the Guillemot family a right of priority) and will not be able to increase its stake in Ubisoft beyond 9.99 percent of Ubisoft’s capital and voting rights for a period of eight years.

As a result of this transaction, Ubisoft’s governance will remain unchanged and Tencent will not have any operational veto rights.

“The expansion of the concert with Tencent further reinforces Ubisoft’s core shareholding around its founders and provides the company with the stability essential for its long-term development.” said Yves Guillemot, Chief Executive Officer and Co-Founder of Ubisoft.

“In a context where platforms and business models are converging, this transaction, which validates our strategy and highlights the strong intrinsic value of the assets we have built over the long term, is excellent news for our teams, gamers and shareholders,” he said.

He also said Tencent is a key shareholder partner for many of the industry’s leaders, who have created some of the most outstanding video games, and this transaction reinforces Ubisoft ability to create strong value over the coming years.

Ubisoft is a creator of worlds, committed to enriching players’ lives with original and memorable entertainment experiences.

Its global teams create and develop a deep and diverse portfolio of games, featuring brands such as Assassin’s Creed, Brawlhalla, For Honor, Far Cry, Tom Clancy’s Ghost Recon, Just Dance, Rabbids, Tom Clancy’s Rainbow Six, The Crew, Tom Clancy’s The Division, and Watch Dogs.

Through Ubisoft Connect, players can enjoy an ecosystem of services to enhance their gaming experience, get rewards and connect with friends across platforms.

With Ubisoft+, the subscription service, they can access a growing catalog of more than 100 Ubisoft games and DLC. For the 2021–22 fiscal year, Ubisoft generated net bookings of €2.13 billion ($2.11 billion).

“The team at Ubisoft has shown an impressive ability to consistently create world-class entertainment along with a diverse portfolio of brands that include some of the most successful franchises in the industry,” said Martin Lau, President of Tencent.

“We are excited to expand our engagement with the founders, the Guillemot family, as Ubisoft continues to develop immersive game experiences, and to bring some of Ubisoft’s most well-known AAA franchises to mobile,

“This agreement also aligns with our philosophy to invest alongside creative founders with full confidence that they will lead their companies to new heights,” he added.

Tencent which was founded in Shenzhen, China, in 1998, is listed on the main board of the Stock Exchange of Hong Kong.

The company uses technology to enrich the lives of internet users. Its communication and social services, Weixin and QQ, connect users with each other and with digital content and services, both online and offline, making their lives more convenient.

Its targeted advertising service helps advertisers reach out to hundreds of millions of consumers in China. Its FinTech and business services support its partners’ business growth and assist their digital upgrade.

The firm invests heavily in talent and technological innovation, actively promoting the development of the internet industry.

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