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Ubisoft strengthens its core shareholding via the expansion of the concert around the group's founders to the benefit of its long-term stability and development

·7-min read
UBISOFT ENTERTAINMENT
UBISOFT ENTERTAINMENT

Ubisoft strengthens its core shareholding
via the expansion of the concert around the group's founders
to the benefit of its long-term stability and development

Tencent acquires a minority passive stake in Guillemot Brothers Limited

Ubisoft’s governance is unchanged
and the Guillemot family retains exclusive control of Guillemot Brothers Limited

Shared confidence in the prospects of the strategic partnership between Ubisoft and Tencent to bring several of Ubisoft's AAA franchises to mobile devices

Download the Press Release

PARIS September 6, 2022 - Today, Ubisoft announced that Tencent has acquired a minority stake in Guillemot Brothers Limited and has entered into the concert with the company’s founders.

The expansion of the concert with Tencent further reinforces Ubisofts core shareholding around its founders and provides the company with the stability essential for its long-term development. said Yves Guillemot, CEO and Co-Founder, Ubisoft.

In a context where platforms and business models are converging, this transaction, which validates our strategy and highlights the strong intrinsic value of the assets we have built over the long term, is excellent news for our teams, gamers and shareholders. Tencent is a key shareholder partner for many of the industrys leaders, who have created some of the most outstanding video games. This transaction reinforces our ability to create strong value over the coming years.

The team at Ubisoft has shown an impressive ability to consistently create world-class entertainment along with a diverse portfolio of brands that include some of the most successful franchises in the industry, said Martin Lau, President of Tencent. We are excited to expand our engagement with the founders, the Guillemot family, as Ubisoft continues to develop immersive game experiences, and to bring some of Ubisoft’s most well-known AAA franchises to mobile. This agreement also aligns with our philosophy to invest alongside creative founders with full confidence that they will lead their companies to new heights.

Transaction details

Tencent acquires a 49.9% economic stake with 5% voting rights in Guillemot Brothers Limited

Tencent's investment in Guillemot Brothers Limited amounts to €300 million (€200 million share acquisition and €100 million capital increase), at an implied valuation for Ubisoft of 80€ per share 1.

In addition, Tencent is providing Guillemot Brothers Limited with a long-term unsecured loan to refinance its debt2 and provide additional financial resources that can be used to acquire equity in Ubisoft.

Guillemot Brothers Limited remains exclusively controlled by the Guillemot family. Tencent will not be represented on its Board of Directors and will not obtain any consent or veto rights over the business.

Expansion of Ubisoft founders’ concert

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 has authorized Tencent to increase its direct stake in Ubisoft from 4.5% to 9.99% of the capital or voting rights. Tencent will not be able to sell its shares in Ubisoft for a period of 5 years (and beyond will give the Guillemot family a right of priority) and will not be able to increase its stake in Ubisoft beyond 9.99% of Ubisoft's capital and voting rights for a period of 8 years.

As a result of this transaction, Ubisoft's governance will remain unchanged and Tencent will not have any operational veto rights.

 

Number of Shares

Number of Voting Rights

% of Shares Outstanding

% of Voting Rights

 

Pre-
money

Post-money

Pre-
money

Post-money

Pre-money

Post-
money

Pre-
money

Post-money

Guillemot Family (including Guillemot Corporation SA)

3,272,391

2,222,224

6,480,512

4,380,178

2.6%

1.8%

4.7%

3.2%

Guillemot Brothers Ltd

16,036,032

17,086,199

22,985,864

24,036,032

12.8%

13.6%

16.7%

17.6%

Of which Ubisoft shares held by Guillemot Brothers Ltd via derivative contracts

9,086,199

9,086,199

9,086,199

9,086,199

7.2%

7.2%

6.6%

6.6%

Tencent

5,591,469

5,591,469

5,591,469

5,591,469

4.5%

4.5%

4.1%

4.1%

Concert

19,308,423

24,899,892

29,466,377

34,007,679

15.4%

19.8%

21.4%

24.9%

The agreement signed with Tencent reflects Ubisoft's rich portfolio of assets, one of the most powerful in the video game industry:

  • A 17,000-person strong creative and production powerhouse, structured around the "Lead & Associate" organization drawn from Ubisoft's global network of studios and combining high AAA production standards with world-class creative and engineering talent.

  • The industry's deepest and most diverse portfolio of proprietary brands, including Anno®, Assassin's Creed®, Beyond Good & Evil, Brawlhalla®, The Crew®, Tom Clancy's The Division®, Far Cry®, For Honor®, Tom Clancy's Ghost Recon®, Hungry Shark®, Just Dance®, Might & Magic®, Prince of Persia, Rabbids®, Tom Clancy's Rainbow Six®, Rayman®, Splinter Cell®, Trackmania®, Watch Dogs®.

  • The company's robust proprietary technologies including its cutting-edge engines (Anvil and Snowdrop), its online services and distribution platform (Ubisoft Connect) and Ubisoft's rapidly expanding video game hosting business (i3D.net).

As a reminder, the strategic partnership with Tencent covers the development of mobile titles from several of Ubisoft's major franchises and the launch of several of Ubisoft's PC titles in China.

Contacts Ubisoft

Investor Relations
Jean-Benoît Roquette
SVP Investor Relations
+ 33 1 48 18 52 39
Jean-benoit.roquette@ubisoft.com
Press Relations
Michael Burk
Senior Director of Corporate Public Relations
+ 33 1 48 18 24 03
Michael.burk@ubisoft.com

Alexandre Enjalbert
Senior Investor Relations Manager
+33 1 48 18 50 78
Alexandre.enjalbert@ubisoft.com

Contact Tencent

Press Relations
Bernd Eitel
Head of Communications, Europe
+41 79 854 7074
berndeitel@tencent.com

Disclaimer
This press release may contain estimated financial data, information on future projects and transactions and future financial results/performance. Such forward-looking data are provided for information purposes only. They are subject to market risks and uncertainties and may vary significantly compared with the actual results that will be published. The estimated financial data have not been audited by the Statutory Auditors. (Additional information is provided in the most recent Ubisoft Registration Document filed on June 14, 2022 with the French Financial Markets Authority (l’Autorité des Marchés Financiers)).

About Ubisoft
Ubisoft is a creator of worlds, committed to enriching players’ lives with original and memorable entertainment experiences. 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®. Through Ubisoft Connect, players can enjoy an ecosystem of services to enhance their gaming experience, get rewards and connect with friends across platforms. With Ubisoft+, the subscription service, they can access a growing catalog of more than 100 Ubisoft games and DLC. For the 2021–22 fiscal year, Ubisoft generated net bookings of €2,129 million. To learn more, please visit: www.ubisoftgroup.com.

About Tencent
Tencent uses technology to enrich the lives of Internet users. Our communication and social services, Weixin and QQ, connect users with each other and with digital content and services, both online and offline, making their lives more convenient. Our targeted advertising service helps advertisers reach out to hundreds of millions of consumers in China. Our FinTech and business services support our partners’ business growth and assist their digital upgrade.
Tencent invests heavily in talent and technological innovation, actively promoting the development of the Internet industry. Tencent was founded in Shenzhen, China, in 1998. Shares of Tencent (00700.HK) are listed on the Main Board of the Stock Exchange of Hong Kong.

1 Post transaction, Guillemot Brothers Limited will hold 17,086,199 Ubisoft shares, including 9,086,199 shares held via derivative contracts, which are described in the declarations of threshold crossing n°218C1609 and n°219C0239. The transaction values the 8,000,000 Ubisoft shares held by Guillemot Brothers Limited (including 1,050,167 Ubisoft shares held directly by certain family members and which will be transferred to Guillemot Brothers Limited), that are not owned through derivative contracts, at €80 per share for a post-money enterprise value of Guillemot Brothers of approximately €640 million.

2 excluding derivative contracts

Attachment