Ubisoft
Tencent is considering buying Ubisoft due to the French company’s recent financial troubles
Ubisoft seems to be in serious problems after recent issues caused their stock to drop sharply, and now Tencent seems to be eyeing an acquisition.
Ubisoft, one of the oldest video game development and distribution companies still active, has found itself in serious economic difficulties. The company based in France, responsible for recent titles such as Star Wars Outlaws and Prince of Persia: The Lost Crown, has lost 54% of its stock market value this year, and to reverse this decreasing trend, Chinese giant Tencent is considering an acquisition proposal for the Guillemot family, owners of Ubisoft.
Ubisoft and the Guillemot family’s efforts to find a financial solution: is Tencent its lifeline?
Bloomberg informs of a possible purchase of Ubisoft by Tencent, which the Guillemot family itself has proposed, the owners of the French company. 2024 has been a disastrous year for this entertainment software development and distribution company, as it has lost more than half of its stock market value.
Faced with this critical situation, Tencent is posited as a possible savior. The Chinese company and Guillemot Brothers Ltd. have met with external consultants to try to find a way to stabilize the downward trend in the market price of Ubisoft shares, which has fallen 54% this year. At the time we publish this news, the company has a market capitalization – a stock market value – of $1.814 billion. Tencent owned 9.2% of the shares at the end of April this year, while the Guillemot family owns about a fifth: 20.5%.
The Bloomberg report also talks about some minority shareholders like AJ Investments who have repeatedly suggested the sale of Ubisoft to a strategic investor so that the shares recover their value. In any case, negotiations between Ubisoft and Tencent are in an early phase, and there is no certain confirmation that the sale will take place.
The value of the company’s shares fell to its lowest in more than a decade after the announcement of the delay of Assassin’s Creed Shadows, one of the company’s most anticipated titles.
Nevertheless, as soon as the information about the possible purchase by Tencent emerged, the individual price of each share rose around 33%, so the possibility of acquisition has caused investors’ perceptions to begin to change.
In 2022, Tencent positioned itself as one of Ubisoft’s major investors, which not only acquired a little less than 10% of the company’s shares but also 49.9% of the Guillemot brothers’ parent company. Despite this key acquisition of shares in both companies, the CEO of Ubisoft Yves Guillemot has assured in different interviews that they have continued to have freedom both creatively and when it comes to working or collaborating with whomever they have deemed appropriate.
Ubisoft was founded in 1986 by the five brothers of the Guillemot family.: Christian, Claude, Gérard, Michel and Yves. Since then, they have been directly responsible for the creation of many beloved and high-quality video game franchises such as Assassin’s Creed, Far Cry, Ghost Recon, Just Dance, Rainbow Six, Rayman, and Splinter Cell. They also have other powerful brands in their portfolio such as Driver and Prince of Persia.
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