Tencent has announced it is in talks to buy out UK-based Sumo Digital.
The deal will cost $1.27 billion (~£919 million).
The deal also expands on Tencent’s previous 8.75% ownership stake in Sumo, giving the former total ownership of the latter.
Reportedly, Sumo’s share price valuation increased, with a closing figure of 43% per share (~513 pence/share).
Sumo CEO Carl Cavers said;
“The three founders of Sumo…Paul Porter, Darren Mills, and I are passionate about what we do. And we are fully committed to continuing in our roles.
The opportunity to work with Tencent is one we just couldn’t miss. It would bring another dimension to Sumo. [It would start] presenting opportunities for us to truly stamp our mark on this amazing industry…
Tencent has a strong track record for backing management teams and their existing strategies. Alongside the acceleration of own-IP work, Tencent has demonstrated its commitment to backing our client work. [Tencent also] has stated its intention to ensure that we have the necessary investment to continue focusing on work with our key strategic partners on turn-key and co-development projects”.
Tencent’s Chief Strategy Officer, James Mitchell, added;
“Tencent is proud to have been an investor in Sumo since 2019. We view the proposed combination as an evolution of our partnership. Tencent is a committed investor in the game industry. [It boasts] a track record of supporting the growth of game studios around the world. We hold Sumo’s team…in high regard, and its strategy and spirit of innovation have underpinned the success of the business over many years”.
Sumo Digital has become the latest UK-based studio acquired in a $1billion+ purchase. For anyone unfamiliar with the studio, Sumo has developed (or helped develop); OutRun 2, the Sonic & SEGA All-Stars Racing series, Forza Horizon 2, LittleBigPlanet 3, Disney Infinity 3.0, Hitman (2016), Hitman 2, Crackdown 3, Hotshot Racing, Sackboy: A Big Adventure, and Hood: Outlaws & Legends.
Some 750 employees currently work for Sumo (or its subsidiaries/various divisions).
Additionally, Sumo is also the parent company behind The Chinese Room, Pipeworks, Lab42, PixelAnt Games, and Red Kite Games.
Or, rather, Tencent is now the parent company of those studios…
ABG’s Senior Editor (News), YouTube content creator/streamer.