Tencent acquires gaming studio Sumo for $1.3 billion

Tencent revealed on Monday plans to acquire British video game company Sumo Group in a $1.27 billion deal, raising Sumo’s last closing price.

The Chinese titan already owns 8.75 percent of the company’s stake, and with this purchase it will increase Sumo’s last closing price by offering a premium 43 percent rise, according to Games Industry.

U.K.-based Sumo is a known name in the gaming industry with its well-regarded core studio Sumo Digital. Sumo Digital carried out contract work with some of the most famous names in the gaming industry.

The video game developer studio is mostly known for developing Sony’s PlayStation 5 “Sackboy: A Big Adventure” and the original studio behind Microsoft’s “Crackdown 3” for Xbox consoles and PC.

“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,” said Sumo CEO Carl Cavers in a statement.

“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,” he added.

The acquisition will go through Tencent’s exclusively owned subsidiary Sixjoy Hong Kong Limited with shares registered in Hong Kong.

If the acquisition is to be finalized, the video game company will be the latest public UK games company to be purchased for over one billion dollars, following EA’s acquirement of F1 developer Codemasters earlier this year.

“Tencent is proud to have been an investor in Sumo since 2019, and we view the proposed combination as an evolution of our partnership. Tencent is a committed investor in the game industry, with a track record of supporting the growth of game studios around the world. We hold Sumo’s team and the games they produce in high regard, and its strategy and spirit of innovation have underpinned the success of the business over many years,” James Mitchell, Tencent’s Chief Strategy Officer addressed the acquisition in a statement.

The Chinses company intends on bringing its knowledge and capabilities to speed up Sumo’s growth both in the UK and abroad by supporting creative talent and the gaming market.

Furthermore, the proposed purchase will be beneficial for all stakeholders by delivering captivating value for the gaming company’s stakeholders while maintaining the company’s growth in the future.