Tencent is set to buy Sumo Group in a $1.27 billion deal, as the company announced.
Sumo Group is the owner of Sumon Digital (Sackboy: A Big Adventure, Crackdown 3), The Chinese Room (Everybody’s Gone to the Rapture, Dear Esther), Lab 42, and more. Although Sumo does develop its own IP, the company is best known for developing games for other publishers, which will continue under the new ownership.
Tencent is offering 513 pence a share for Sumo, which is a 43% increase on Sumo’s last closing price (358 pence). London-listed shares of Sumo also skyrocketed more than 40% on news of the deal Monday.
Sumo Group CEO Carl Cavers said: “The opportunity to work with Tencent is one we just couldn’t miss. It would bring another dimension to Sumo, presenting opportunities for us to truly stamp our mark on this amazing industry, in ways which have previously been out-of-reach.”
Additionally, Carl pointed out the future directions of the company with the resources of Tencent. “Tencent has a strong track record for backing management teams and their existing strategies,” he said. “Alongside the acceleration of own-IP work, Tencent has demonstrated its commitment to backing our client work and 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”
James Mitchell, Tencent’s Chief Strategy Officer, also claimed that the company holds Sumo’s games in “high regard,” showing great confidence in this enhanced partnership.
“Tencent intends to bring its expertise and resources to accelerate the growth of Sumo both in the UK and abroad, supporting Sumo in the market for top-notch creative talent, and the UK as a hub for game innovation,” James said. We believe the proposed transaction benefits all stakeholders, delivers compelling value for Sumo shareholders, while enhancing the Sumo business for the future.”
Although the deal has been agreed upon, it is still subject to shareholder approval. Meanwhile, the Guardian reported that Tencent has already received support to back the takeover from 27% of shareholders.