Tencent has agreed to purchase UK video game company Sumo Group for £919 million ($1.27 billion) in cash through its Sixjoy Hong Kong Limited subsidiary.
The deal will see Tencent pay £5.13 per Sumo share, representing a premium of approximately 43.3 percent on the last closing price of £3.58 per share on July 16, 2021.
Tencent had previously grabbed a 10 percent stake in Sumo Group, which owns and operates various development and work-for-hire studios including Sumo Digital, The Chinese Room, Red Kite Games, Pipeworks, Atomhawk, and Timbre Games, back in November 2019.
Sumo Group currently employs over 1,200 people in 14 studios across five countries, and has worked on high-profile video games like Sackboy: A Big Adventure, LittleBigPlanet 3, Snake Pass, Crackdown 3, and Little Orpheus.
The Sumo Board believes the Tencent acquisition is in the best interests of the company and its shareholders, and intends to recommend unanimously that shareholders vote to approve the deal.
Commenting on the move, Sumo chief exec Carl Cavers claimed the deal would allow the UK company to strengthen its growth prospects "though the application of Tencent's strategic resources to our own-IP, turn-key development work ambitions, and possible acquisition opportunities."
"Tencent has a strong track record for backing management teams and their existing strategies. Alongside the acceleration of Own-IP work, Tencent has demonstrated its commitment to backing our client work and has stated its intention to ensure that we have the necessary investment to continue focusing on work with our key strategic partners on turn-key and co-development projects," continued Cavers.
"We love what we do and have some amazing relationships with the world's best video game publishers. Sumo will continue to work with these clients to break new ground and create even more fantastic games."
Last week it was reported that Tencent is currently in talks to purchase Crysis developer Crytek for over $350 million. Prior to that, the Chinese company opened a new Seattle studio through its Timi Studios subsidiary to create triple-A games, and picked up a majority stake in Spec Ops developer Yager.