Tencent Holdings Ltd, which is China's biggest gaming group, is all set to buy 84 percent stake in "Clash of Clans" mobile game maker Supercell. The deal is valued at about $8.6 billion.
On Wednesday, shares of Tencent Holdings Ltd. last traded at HKD 177.00, 2.37 percent higher from their previous close on the Hong Kong Stock Exchange.
The Supercell deal, which is Tencent's biggest acquisition ever, will strengthen the firm's position as the world's biggest video game player by revenues. When combined, the revenues from both the firms totalled to $11.1 billion in 2015. If the y-o-y growth continues, the new venture would generate about $13 billion this year alone, which is about 13 percent of the world's games market, the company said in a statement.
Shenzhen-based firm Tencent will be acquiring 84 percent stake in Supercell through Japan's SoftBank Group. With the latest acquisition, Tencent's interest in overseas will expand. The firm, which also has stakes in Epic Games and Riot Games, still relies on the local market, Reuters reported.
Supercell, which is the creator of "Boom Beach" and "Hay Day," has a handful of successful games and generates revenues from "in-game" purchases.
In November 2015, one of the largest interactive gaming and entertainment companies Activision Blizzard, the producer of "Call of Duty," bought Candy Crush developer King Digital Entertainment in a deal worth $5.9 billion, BBC reported.
Finnish game making company Supercell is already the number one grossing Western games developer in China. It recently launched its fourth game, "Clash Royale," this year. Half of Tencent's $15 billion revenues were accounted for by online games.
During an investor's call on Tuesday, Tencent President Martin Lau said "we are very bullish on the mobile games market," the Wall Street Journal reported.
