Tencent €300 million investment in Ubisoft
Davis Polk is advising Tencent Holdings Limited in connection with its investment in Ubisoft Entertainment S.A., a French company listed on the Euronext Paris market.
On September 6, 2022, Tencent acquired a 49.9% economic stake with 5% voting rights in Guillemot Brothers Limited, the holding company of Ubisoft’s founders and Ubisoft’s largest shareholder. Tencent’s investment in Guillemot Brothers Limited amounts to €300 million (€200 million share acquisition and €100 million capital increase). In addition, Tencent is providing Guillemot Brothers Limited with a long-term unsecured loan to refinance its debt and provide additional financial resources that can be used to acquire additional equity in Ubisoft.
The Guillemot family concert with respect to Ubisoft is extended to include Tencent. The expanded concert may increase its stake to 29.9% of Ubisoft’s capital or voting rights. Within this limit, Guillemot Brothers Limited and the Guillemot family may each increase their equity ownership in Ubisoft. Additionally, Ubisoft’s Board of Directors authorized Tencent to increase its existing direct stake in Ubisoft from 4.5% to 9.99% of the capital or voting rights.
Tencent is an integrated internet company that provides value-added internet services, including communications and social, entertainment, content, online advertising, fintech and cloud services.
Ubisoft is a producer, publisher, and distributer of video games for consoles, PCs, smartphones, and tablets. Ubisoft’s global teams create and develop a deep and diverse portfolio of games, featuring brands such as Assassin’s Creed, Brawlhalla, For Honor, Far Cry, Tom Clancy’s Ghost Recon, Just Dance, Rabbids, Tom Clancy’s Rainbow Six, The Crew, Tom Clancy’s, The Division and Watch Dogs.
The Davis Polk corporate team includes partners Jacques Naquet-Radiguet and Miranda So, counsel William Tong and associates Ferdinand Barbé, Marcelo Valenca and Rebecca Yang. Partner Paul D. Marquardt is providing CFIUS advice. Partner Nick Benham and associate Joshua Bunn are providing finance advice. Counsel Dominic Foulkes is providing tax advice. Members of the Davis Polk team are based in the Paris, London, Hong Kong and Washington DC offices.