Tencent acquires majority stake in Supercell

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Following weeks of speculation, Chinese digital titan Tencent has bought a majority stake in Finnish mobile gaming company Supercell from Japan’s Softbank for $8.6bn.

The deal, which values Supercell at $10.2bn, also includes marketing and publishing agreements that should enable Supercell’s mobile games to achieve wider distribution in mainland China. 

Supercell CEO Ilkka Paananen outlined four reasons why Tencent is a good fit for the company – the deal enables it to stay in Helsinki and remain independent; expand its reach among China’s fanatical gaming communities; remain a private company; and also be aligned with Tecent’s other major gaming acquisitions including Riot Games. (See Ilkka Paananen’s blog post here).

Supercell’s top four games – Clash Of Clans, Hay Day, Boom Beach and Clash Royale – currently reach about 100 million users per day.

In a statement Paananen said: “We founded Supercell to make great games that people all over the world would play for decades and become part of the rich history of games…Tencent’s investment secures what has made all of this possible, which is our independence and unique culture of small and independent teams.”

Tencent president Martin Lau said: “It is important to us that Supercell stays true to its roots by sustaining its unique culture, continuing to be headquartered in Finland, and representing its home proudly.”

Softbank and its subsidiary GungHo Online Entertainment acquired 51% of Supercell in 2013, increasing its stake by another 22% in 2015 (see previous story here). In an unrelated move, it has also just been announced that Softbank president and former Google executive Nikesh Arora is stepping down following pressure from shareholders.

In addition to acquiring games companies, Tencent has recently partnered with Los Angeles and Shanghai-based Tang Media Partners to back a TV production venture with Stuart Ford’s production and sales company IM Global and has also formed a China joint venture, WME-IMG China, with Hollywood talent agency WME-IMG and Sequoia Capital China.