Tencent Holding (OTCMKTS:TCEHY) entered a pact to buy a 29% stake in Funcom. The deal is valued at $134.33 million based on the closing price on Friday. KCJ Capital has sold the shares to Tencent at a premium of 21.8% on the closing price of Funcom on Friday. Tencent becomes a significant shareholder in Funcom with this stake.
Shares of Funcom rises
Funcom, which is located in the Netherlands, develops online games. Commenting on the deal, Chief Executive Officer of Funcom, Rui Casais said the company would benefit a lot from the knowledge, expertise, and insight of Tencent. The company is pleased to work with Tencent going forward. Tencent is a renowned player in online games. It is a reputed, long-time investor. The shares of Funcom have surged by 23% in the early trade.
Established in 1983 in the Netherlands, Funcom has developed games like Mutant Year Zero: Road to Eden, Conan Exiles, The Secret World in 2012, Anarchy online in 2001, and The Longest Journey. The current working projects of Funcom include a sandbox game set.
Majority owner in Riot Games
The Chinese Media Conglomerate – Tencent holds a significant stake in Riot Games, which developed the League of Legends. The company also owns a minority stake in Epic Games. Tencent acquired Sharkmob, a game studio based in Sweden, in May 2019. It has also partnered with the Pokemon Company in July 2019. Tencent is the largest gaming company in the world. It holds significant stakes in gaming, music, film, and tech.
Tencent is not familiar among the gamers. It holds majority stakes in the most significant games in the world that include Call of Duty, Fortnite, and League of Legends. It is a prominent video game company in the world. The company produced a well know the movie “Men in Black International.” Its upcoming films include Terminator: Dark Fate, and Top Gun: Maverick.
Tencent operates a messaging service – QQ, and owns an App – WeChat. Both QQ and WeChat commands a combined user base of more than 1 billion. Nintendo took several years to build the characters and game franchises from scratch. The story of Tencent is different. It either buys or invests in gaming companies.