Vivendi SA, the French media company with a cash pile of $10 billion bought minority stakes in two video-game developing company Ubisoft Entertainment SA and Gameloft SE for around $183 million. The share value of two companies jumped in Paris trading.
Founded in 1986 by Yves Guillemot and his four brothers, the video-game maker Ubisoft is well-known as the creator of hit vidgame franchises like Assassin’s creed, Splinter Cell, Just Dance and Raving Rabbits. Headquartered near Paris, it operates in 28 countries. It’s Ubisoft Motion Pictures is also producing Justin Kurzel’s Assassin’s Creed with Marion Cotillard and Michael Fassbender. The game Raving Rabbits have been turned into popular animated TV series for channels like Nickelodeon and France Televisions. On the other hand, Gameloft which is the sister concern of Ubisoft, is a leading creator of games for mobile and apps.
In the acquisition deal, Vivendi purchases 6.6% stake in Ubisoft for $160 million and 6.2% in Gameloft for $22.5 million .With the acquisition, Ubisoft’s and Sameloft’s share prices have jumped 14% and 17% respectively. The investments in these two company shows some extra interest from Vivendi in the video-game industry, after it slowly sold shares in Activision Blizzard Inc in the last two years to hold back only 5.7% stake as in June.
With super hit games like Assassin’s Creed and Rainbow Six, Ubisoft is struggling to attract customers from market giants Activision and Electronic Arts Inc., which are about 10 times its size to its $3 billion market capitalization. Like its competitors it’s been working on various sources like subscriptions. toys, animated tv series to move further traditional game console discs.
Regarding the purchase, Gameloft released statement saying, “We take note of the unsolicited action on the part of Vivendi. We reiterate our intention to remain independent, an approach that, since our founding 16 years ago, enabled us to become a world leader in mobile gaming, and from 2015, a significant and fast growing actor of mobile advertising.”
Ubisoft also said, “We reiterate our intention to remain independent.” The acquisition seems to be a comeback for Vivendi after selling its stakes in Activision Blizzard but the company claims to be aiming at TV and its music operations.