Tencent Holdings, one of China’s largest tech giants, has agreed to buy Sumo Group, a British video game company founded in 2003, for $1.27 billion.
Tencent, which has entered another acquisition process, stated that the shareholders of Sumo Group will receive $ 7.08 in cash per share. The bid is a 43% increase over Sumo’s last closing price of $4.94. Since Sumo went public on the London Stock Exchange’s AIM market in 2017, its share has increased severalfold, as another sign of accelerating deals in the gaming industry. According to Drake Star Partners, a total of $60 billion in investments, acquisitions and public offerings took place in the gaming industry in the first half of 2021.
Sumo is known for games like Little Big Planet 3, Team Sonic Racing and Hood: Outlaws and Legends, has 14 studios in five countries, and employs more than 1,200 staff. Additionally, the acquisition looks set to resonate in the US, as Sumo is owned by Oregon-based Pipeworks, the maker of Rival Peak.
Sumo CEO Carl Cavers made the following comments in a statement:
“The three founders of Sumo, who work in the business, Paul Porter, Darren Mills, and I are passionate about what we do and 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, presenting opportunities for us to truly stamp our mark on this amazing industry, in ways which have previously been out-of-reach.”
James Mitchell, Tencent’s Chief Strategy Officer, said:
“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. We believe the proposed transaction benefits all stakeholders, delivers compelling value for Sumo shareholders while enhancing the Sumo business for the future.”