China’s Tencent will buy Clash of Clans developer Supercell for $8.6 billion

Tech giant Tencent is leading a group of investors that will pay $8.6 billion to acquire a majority stake in Finnish game maker Supercell.

Tencent will acquire up to 84% of Supercell in a transaction valuing the Company at an equity value of approximately Dollars 10.2 billion (approximately JPY 1.1 trillion2).

The deal would mark the single biggest investment in a video games company by Tencent, which owns significant stakes in United States-based developers Riot Games, Epic Games, Glu Mobile and Activision Blizzard, as well as South Korean firm CJ Games and Japanese company Aiming.

Tencent said Supercell’s current management will keep their operational independence and the company will remain in Finland.

SoftBank Chairman Mayayoshi Son had mentioned to Supercell CEO Ilkka Paananen that the company would be interested in finding a buyer for its stake in the company to finance its SoftBank 2.0 strategy, Paananen says on Supercell’s web site. Upon transfer of the shares, Supercell will no longer be a subsidiary of SBG and will no longer be consolidated into SBG’s financial results.

Included in the games Tencent will acquire with the purchase of Supercell are Clash of Clans, Hay Day, Clash Royale and Boom Beach. The deal values the company at $10.2 billion.

As per the acquisition agreement, SoftBank’s two subsidiaries will receive a dividend of approximately $0.4 billion or around 43 billion Japanese yen from Supercell prior to closing of the transaction.

Tencent said it will buy 84.3% of Supercell in three stages via a wholly owned consortium. And growth prospects are pretty good, considering, Tencent has the world’s largest gaming market – China – on its doorstep, where Supercell titles were already gaining popularity. “Today is about chasing a future for Supercell that we have always dreamed of”.

Do you play any of Supercell’s games?

The deal certainly puts Tencent in a stronger position as a gaming powerhouse.

When people think of smartphone games, in addition to “Clash of Clans”, titles such as “Candy Crush” or, maybe, “Kim Kardashian Hollywood” come to mind.

The transaction, which is now expected to close during the third calendar quarter of 2016, is subject to customary regulatory approvals and closing conditions.

If pushed through, the deal would become the “biggest-ever purchase of a mobile games maker”, underscoring the growing interest of big companies in the mobile gaming market, Reuters said.