Ubisoft Entertainment (UBI) M&A Announcement summary

Deal rationale and strategic fit

• A new subsidiary is being created to focus on Assassin's Creed, Far Cry, and Tom Clancy's Rainbow Six, aiming to maximize asset value and build evergreen, multi-platform game ecosystems.

• The initiative is part of a broader transformation to streamline operations, enhance agility, and accelerate growth in key franchises.

• Tencent's investment supports the expansion of creative, multiplayer, and free-to-play offerings, as well as the integration of more social features.

Financial terms and conditions

• Tencent will invest EUR 1.16 billion for an approximate 25% economic interest in the new entity, valuing it at a pre-money enterprise value of around EUR 4 billion.

• The new entity receives an exclusive, irrevocable, perpetual license for the three franchises' video game IPs in exchange for royalty.

• Proceeds will be used to reduce net debt, reinforce the balance sheet, accelerate transformation, and support franchise growth.

• Tencent receives minority protection and consent rights, share transfer provisions, and a 5-year lock-up on its shares.

Integration plans and timeline

• The new entity will have a dedicated leadership team supervised by a board controlled by Ubisoft.

• Ubisoft will continue to control and consolidate the new entity, retaining majority ownership for at least two years post-transaction.

• Transaction completion is expected by year-end or before the end of 2025, pending regulatory and carve-out conditions.

• The new subsidiary will include teams from Montréal, Quebec, Sherbrooke, Saguenay, Barcelona, and Sofia.