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Tencent Considering Buying 20% Stake in French French Video Game Firm Voodoo

July 15, 2020 5:32 am

Beijing (PingWest)—Tencent is considering bidding for a minority stake in French mobile game developer Voodoo, Chinese news outlet Sina reported, citing people familiar with the matter.

Tencent might be interesting in buying a 20-25% stake for about $568 million. However, the Chinese gaming giant isn't the only potential bidder, as other firms are also interested in purchasing Voodoo's shares. 

Bloomberg reported in May that Voodoo’s backers have kicked off the sale of a stake in the company, and marketing materials with an overview of the business have been sent to potential buyers. Ubisoft Entertainment, the French video game studio, and Zynga, the American game developer, are both vying for Voodoo. 

The deal could value Voodoo at more than 1.5 billion euros ($1.6 billion), according to the report. 

Currently, a majority stake in Voodoo is held by the two co-founders, Alexandre Yazdi and Laurent Ritter. In addition, West Street capital partners, a private equity arm of Goldman Sachs, also owns some shares.

If the transaction between Tencent and Voodoo does take place, the French developer will be able to reach millions of Chinese players through Tencent's WeChat Mini Games (Instant Games), said Daniel Ahmad, an analyst at Niko Partners. "Tencent is continuing its silent global expansion through identifying gaming firms to invest in or acquire," he added.

Tencent, the world's largest gaming company by revenue, has invested in a number of companies in the video game industry. It wholly owns League of Legends developer Riot Games, an 84.3% stake in Supercell, 80% of Grinding Gear Games, 40% of Epic Games, 11.5% of Bluehole, 5% stakes in Activision Blizzard, Ubisoft and Paradox Interactive.

The giant has been active in looking to acquire companies amid the COVID-19 pandemic. It is also in advanced talks to purchase and privatize Hong Kong-based video game company Leyou.