Chinese tech giant Tencent announced it is buying British gaming company Sumo Group for US$1.3 billion in its latest globalization initiative and to add to its gaming titles.
The board of the British company has agreed to the purchase which is a premium of approximately 43.3% to Sumo's closing price of 358 pence per share last Friday.
The cash offer by Tencent's wholly-owned subsidiary Sixjoy Hong Kong Limited for acquisition of the entire issued, and to be issued, share capital follows a strategic investment of around 8% stake by Tencent in Sumo in November 2019.
The two organizations "have a strong cultural alignment, in addition to complementary skills and expertise," according to an official statement on Monday.
Gaming market research firm New Zoo expects the global gaming market to enjoy an 8.7% compound annual increase to US$218.7 billion by 2024 and 2.8 billion of the world's 3 billion gamers will be playing using mobile devices.
China will lead the growth in the cloud gaming sector with an estimated US$880 million market value by 2023 as part of the US$5.14 billion global market, thanks to higher smartphone penetration and deployment of 5G networks, the research firm said.
The announcement comes weeks after China's State Administration for Market Regulation's decision to block Tencent's plan to merge China's two top game livestreaming sites, Huya and Douyu, citing anti-monopoly concerns.
腾讯同意收购英国游戏开发商Sumo Group
腾讯控股同意收购Sumo Group Plc的剩余股权,这家中国社交媒体和游戏巨头一连串的游戏领域投资由此又添一笔。