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Investing.com -- Ubisoft (EPA:UBIP) shares jumped more than 10% Friday after the French video-game maker announced plans to establish a new unit with Tencent Holdings (HK:0700).
Ubisoft said on Thursday it had created a subsidiary in which China’s Tencent will invest €1.16 billion ($1.25 billion).
The new entity, valued at approximately €4 billion, will house Ubisoft’s key franchises, including Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six, the company said.
The deal is expected to close before the end of 2025.
Ubisoft’s stock climbed in mid-March following a Bloomberg News report that the company was seeking investors for the new unit, with Tencent named among the potential bidders.
The subsidiary will include development teams working on Tom Clancy’s Rainbow Six, Assassin’s Creed, and Far Cry series across various locations, including Montréal, Quebec, Sherbrooke, and Saguenay in Canada, as well as Barcelona and Sofia.
It will also manage Ubisoft’s existing game portfolio and any future titles in development.
"With the creation of a dedicated subsidiary that will spearhead development for three of our largest franchises and the onboarding of Tencent as a minority investor, we are crystalizing the value of our assets, strengthening our balance sheet, and creating the best conditions for these franchises’ long-term growth and success", Ubisoft CEO Yves Guillemot said in a statement.
"As we accelerate the company’s transformation, this is a foundational step in changing Ubisoft’s operating model that will enable us to be both agile and ambitious", he added.
Morgan Stanley (NYSE:MS) analyst Ed Young said the creation of a new subsidiary “unlocks value” for Ubisoft following a well-received launch of the latest Assassin’s Creed Shadows game.
Shadows had a strong first week, earning a Metacritic score of 82, indicating generally favorable reviews.
Ubisoft reported that the game attracted 2 million players across all platforms within a week of launch, with 1 million players joining in the first 24 hours. This surpasses the launches of Assassin’s Creed Origins and Odyssey, making it the franchise’s second-largest launch after Assassin’s Creed Valhalla.
PC accounted for about 27% of total activations, boosted by a Day 1 release on the Steam platform.