Tencent buys Supercell for more than $ 8 billion

by bold-lichterman

It has been several weeks since the media reported negotiations around a possible sale of the Finnish video game publisher Supercell Oy. This time, the information is confirmed: the Japanese group SoftBank, owner of the company, announced that it had reached an agreement with the Chinese conglomerate Tencent, and several of its partners, for such an operation. The latter are therefore preparing to hand over the portfolio in order to acquire up to 84% of Supercell’s capital as part of a transaction valuing the company at around $ 10.2 billion (approximately $ 8.9 billion euros).

2.1 billion turnover in 2015

At the end of this important transaction, which should be completed in the course of the third quarter of the year, pending the approval of the authorities, SoftBank specifies that it will no longer hold any stakes in Supercell. In addition, the head office of the company should remain in Helsinki and the teams will continue their operations while maintaining a certain independence, it is stressed.

Founded in 2010, Supercell is the source of many successful mobile games, such as Clash Royale, Boom Beach, and especially the very popular Clash of clans. With all of its titles, the company claims a hundred million users every day. Alongside this large community of players, Supercell has also succeeded in monetizing its audience, in particular thanks to an economic model ” freemium », Which consists of offering an application for free to a large audience in order to market options indoors.

A recipe that allowed Supercell to achieve a turnover of 2.1 billion euros in 2015 – despite a slightly lower growth than a year earlier – for an EBITDA of 848 million euros . As early as 2013, SoftBank had already noticed the potential of the company by taking a first stake for 1.5 billion dollars, taking 51% of its capital, before rising to 73.2% last year for a amount not communicated.

Synergies with Tencent

So why is SoftBank now deciding to sell off its shares? “I have great respect for Tencent and its leadership in games, and I believe that with its commitment to uphold the independence of Supercell, Tencent represents the ideal partner to take Supercell to the next level,” Masayoshi said in a statement. Son, the CEO of SoftBank. In reality, the move comes as SoftBank has recently embarked on other major financial transactions, most notably with the sale earlier this month of $ 7.9 billion of shares the group held in Alibaba, a major player. Chinese e-commerce.

In any case, with Tencent as the new majority shareholder, Supercell hopes to create new synergies in its activities. The Chinese Internet services giant is already present in the video games sector, in particular through the American company Riot Games which publishes League of Legends. “This new partnership provides us with exciting growth opportunities in China, where we will be able to reach hundreds of millions of new players through Tencent’s channels,” said Ilkka Paananen, CEO of Supercell. To achieve this, it is possible that the Finnish publisher could rely in particular on WeChat, Tencent’s instant messaging application which has more than 762 million users.