Assassin's Creed Maker Ubisoft's Gaming Subsidiary Secures $1.25 Billion Tencent Backing In Major Deal

Ubisoft Entertainment ( UBSFF ) SA (OTC:UBSFF) is making a major shift in its business structure by launching a separate entity centered around its leading gaming franchises, such as Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six.

This initiative, announced on Thursday, aligns with the company’s larger strategic overhaul, designed to enhance flexibility and sharpen its operational focus.

Tencent Holdings Ltd. ( TCTZF ) has committed 1.16 billion euros ($1.25 billion) to the newly established subsidiary, securing a minority ownership position.

The deal assigns the entity a valuation of roughly 4 billion euros, highlighting the significant market appeal of Ubisoft’s intellectual property.

Ubisoft’s Board of Directors unanimously approved the deal after determining it offered the best value for the company’s assets.

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Through this reorganization, Ubisoft plans to transform its leading game franchises into enduring, multi-platform ecosystems.

“As we accelerate the company’s transformation, this is a foundational step in changing Ubisoft’s operating model that will enable us to be both agile and ambitious. We are focused on building strong game ecosystems designed to become evergreen, growing high-performing brands and creating new IPs powered by cutting-edge and emerging technologies,” said Co-Founder and CEO Yves Guillemot.

The new subsidiary will benefit from greater financial backing and creative capabilities, enabling richer single-player narratives, broader multiplayer experiences, free-to-play access points, and improved social features within its games.

By establishing this new subsidiary, Ubisoft seeks to bolster its financial position by substantially lowering its net debt and driving the expansion of its most successful titles.

The company will also remain committed to developing franchises such as Tom Clancy’s Ghost Recon and The Division, while exploring innovative technologies for upcoming intellectual properties.

The new entity, headquartered in France, will remain under Ubisoft’s full control, with Tencent ( TCTZF ) holding an approximate 25% economic interest. The deal is expected to close before the end of 2025, pending regulatory approvals.

In addition to its minority investment, Tencent ( TCTZF ) will receive certain rights, including a five-year lock-up period on its shares, a right of first refusal, and a put option in case of a change of control at Ubisoft.

Price Action: UBSFF shares closed higher by 9.39% at $15.79 on Thursday.

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