Vivendi to sell stake in Ubisoft, allaying hostile takeover concerns

Ubisoft announced today that Vivendi will sell its entire stake in the company, bringing an end to years worth of concerns of a hostile takeover.

As part of the deal, Vivendi's shares, which make up 27.3 percent of Ubisoft's share capital, will be sold to multiple buyers. Ubisoft itself and CEO Yves Guillemot's Guillemot Brothers SE will purchase a portion of Vivendi's shares. The transaction will also see an investment by two new long-term investors: Chinese conglomerate Tencent and the Ontario Teachers' Pension Plan. Tencent's investment is also part of a "strategic partnership that will significantly accelerate the reach of Ubisoft franchises in China in the coming years," Ubisoft says.

Speaking on the transaction, Ubisoft CEO and co-founder Yves Guillemot said:

The evolution in our shareholding is great news for Ubisoft. It was made possible thanks to the outstanding execution of our strategy and the decisive support of Ubisoft talents, players and shareholders. I would like to warmly thank them all. The investment from new long-term shareholders in Ubisoft demonstrates their trust in our future value creation potential, and Ubisoft's share buy-back will be accretive to all shareholders. Finally, the new strategic partnership agreement we signed will enable Ubisoft to accelerate its development in China in the coming years and fully leverage a market with great potential.

Today, Ubisoft is fully reaping the benefits of our long-term strategy and the successful transformation towards a more recurring and profitable business," said Ubisoft co-founder and CEO Yves Guillemot. "Ubisoft is perfectly positioned to capture the numerous video game growth drivers in the coming years. We are focused more than ever on delivering on our strategic plan.

The move puts to rest fears of a hostile takeover by Vivendi that have hung over Ubisoft for some time. In early 2017, rumors surfaced that Vivendi was considering expanding its stake in Ubisoft in order to force an unsolicited takeover bid. In November, Vivendi said that it had no plans to pursue a hostile takeover for the next six months, leaving the possibility of a bid open for later in 2018.

One particularly interesting part of today's news is Tencent's investment. Based in China, Tencent is a fast-growing player in the gaming space, with its weight behind everything from League of Legends and Clash of Clans to PlayerUnknown's Battlegrounds and Fortnite developer Epic. Its partnership with Ubisoft could help the company further break into the Chinese market with its big franchises, such as Far Cry and The Division.