Ubisoft: Guillemot family joins forces with Tencent

Following a €300 million investment by Tencent, the family holding company Guillemot Brothers, which controls Ubisoft, now owns 24.5% of the voting rights and 19.8% of the equity.

If Tencent had ambitions to become the majority shareholder of Ubisoft after it entered the capital of the French publisher in 2018 after a failed hostile takeover attempt by Vivendi, then the Chinese giant ended up choosing to acquire a passive minority stake in Guillemot Brothers for 49.9. % of capital and 5% of voting rights, which is 300 million euros (200 million euros of securities purchases and 100 million euros of capital increases).

Guillemot Brothers charms Tencent with Ubisoft, but defends himself

In addition to benefiting from a long-term unsecured loan to refinance its debt and provide additional financial resources that can be used to raise Ubisoft’s capital, the Guillemot Brothers family holding company remains solely controlled by the Guillemot family, while Tencent will not be represented on the Board of Directors. and will have no power of approval or operational veto.

Martin Lau, President of Tencent, says:

Ubisoft teams have demonstrated an impressive ability to continually create world-class entertainment, as well as a diverse portfolio of brands, including some of the industry’s strongest franchises. We’re thrilled to expand our partnership with the founding members, the Guillemot family, as Ubisoft continues to develop exciting gaming experiences and bring many of Ubisoft’s most famous AAA franchises to mobile devices. This agreement is also in line with our investment philosophy, with the creative founders fully convinced that they will take their companies to new heights.

Precautions for Ubisoft to avoid a hostile operation

In addition to acquiring a passive minority stake in Guillemot Brothers, Tencent also got the opportunity to increase its stake in Ubisoft (from 4.5% to 9.99%), but this requires several points, such as immutable management, no veto power, and the inability to invest. to receive capital and voting rights up to 8 years, or sell their shares up to 5 years (and later give the Guillemot family the right of priority). In addition, the extended gig could increase his stake to 29.9% of Ubisoft’s equity or voting rights. As part of this restriction, Guillemot Brothers Limited and the Guillemot family may increase their stake in Ubisoft.

Yves Guillemot, CEO of Ubisoft, explains:

The expansion of cooperation with Tencent strengthens the foothold of Ubisoft’s benchmark shareholding around its founders and provides the necessary stability for its long-term development. With platforms and economic models converging, this operation, which validates our strategy and highlights the strong intrinsic value of the assets we have built over a long period of time, is great news for our teams, players and shareholders. Tencent is truly a shareholder partner for many leaders who have created some of the most exceptional games in the industry. This transaction strengthens our ability to create more value in the coming years.