Tencent, the internet behemoth from China, is looking to acquire yet another game development studio. The company has revealed a proposal to purchase the British game studio Sumo Digital in a $1.27 billion deal, Tencent announced on Monday, as reported by Reuters.
Sumo is a huge studio/publisher founded in 2003. It now has 10+ international studios and hundreds of developers. The company most recently released Hood: Outlaws & Legends earlier this year. The company is also known for its work on Crackdown 3, Sackboy: A Big Adventure, and more.
Tencent clearly sees a lot of appeal in Sumo, as the company is a paying a 43% premium on Sumo’s latest stock price.
“Tencent is acquiring Sumo Digital for its breadth of experience developing and operating AAA games and live service games, the majority of which are developed for clients such as Sony, Microsoft, Sega and others,” Niko Partners analyst Daniel Ahmad told VGC about the proposed deal.
Importantly, Tencent’s deal to buy Sumo is only a proposal right now–the deal is not done.
“The Board of Sumo firmly believes the business will benefit from Tencent’s broad video gaming eco-system, proven industry expertise and its strategic resources,” Sumo chairman Ian Livingstone said to Reuters.
Tencent owns League of Legends studio Riot Games, Clash of Clans developer Supercell, and Path of Exile company Grinding Gear. Tencent also has minority investments in a huge group of game studios, including Epic Games, Ubisoft, Activision Blizzard, Platinum Games, and many more.
The $8.6 billion that Tencent paid to acquire Supercell in 2016 is the largest gaming acquisition in history, with Microsoft’s $7.5 billion purchase of ZeniMax and Bethesda ranking second.