A Reuters report indicates that Chinese video game giant Tencent Holdings plans to increase its stake in Ubisoft, the French developer of the hit “Assassin’s Creed” saga.

Tencent, China’s largest video game and social media company, already has a 5% stake in Ubisoft since 2018; however, four people told Reuters that the Chinese firm approached the Guillemot family, founders of Ubisoft, in May to express interest in increasing its stake in the company.

The Guillemot family owns 15% of the company, and three of the sources said that Tencent hopes to buy an additional stake in Ubisoft from them.

Tencent could offer up to 100 euros ($101.84) per share to acquire the additional stake; more than double what Ubisoft shares are currently worth. The Chinese company paid 66 euros per share for the 5% stake in 2018.

According to sources, Tencent will also seek to acquire shares from Ubisoft’s public shareholders (who own 80% of the company).

“Tencent is very determined to get the deal done as Ubisoft is a very important strategic asset,” a source told Reuters. Tencent and Ubisoft have already partnered to bring the latter’s games to China, and the goal of this new deal would reportedly be to help Tencent bring its games to a global audience. It has also been over a year since Ubisoft received a new license to release a game in China.

It’s unclear how much more Tencent wants to own in Ubisoft, valued at $5.3 billion; however, the Chinese company intends to become the French firm’s largest single shareholder with this action, two of the sources said.

According to the sources, the details of the deal are not yet finalized and are subject to change.

Buying more Ubisoft shares would help Tencent alleviate the pressures it has suffered in its local market
Tencent has faced various challenges in the Chinese domestic market over the past few years, where regulatory hurdles in late 2020 stalled new title releases.

The Chinese firm lost tens of billions of dollars in the process, and China’s video game regulator hasn’t granted it new video game licenses since June last year, before freezing game approvals for nearly nine months. Since it resumed approvals in April this year, Tencent has not been included.

Ubisoft is not the only video game company in which Tencent has shares. The Chinese tech giant also has stakes in big game developers like Epic Games and Riot Games.

In turn, in 2016 he bought a majority stake in Supercell, developer of the mobile game “Clash of Clans”, for $8.6 billion. It also owns 9% of UK video game firm Frontier Developments and last year said it would buy another UK developer, Sumo, for $1.3bn.

All of these moves are taking place during a wave of acquisitions in the video game industry. Microsoft proposed to buy Activision Blizzard for $69 billion in January. Sony bought Bungie, the developer of the “Destiny” franchise, for more than $3.6 billion shortly after. In May, Take-Two acquired Zynga for $12.7 billion.

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