PARIS, France – Ubisoft Entertainment SA’s US-listed shares experienced a rapid surge of up to 20% following the announcement that the video game company plans to establish a separate unit for popular titles such as Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six. This new subsidiary, valued at about €4 billion ($4.3 billion), will be home to the intellectual property licenses of these highly acclaimed games.

Tencent Holdings Ltd. will be investing €1.16 billion to acquire a 25% stake in this newly formed entity. This move signifies Tencent’s vote of confidence in Ubisoft, especially after facing challenges in recent years following the easing of pandemic-related restrictions. The substantial valuation of the new unit, higher than Ubisoft’s current enterprise value, suggests Tencent’s belief that the company’s shares are undervalued.

According to Ubisoft Chief Financial Officer Frederick Duguet, the decision to carve out this unit came after receiving multiple expressions of interest and non-binding offers. Analysts like Charles-Louis Planade from Midcap Partners view this as a significant step, indicating that the cash injection from Tencent will help address the company’s financing concerns and potentially unlock its true value.

Ubisoft’s Chief Executive Officer Yves Guillemot expressed optimism about this strategic move, highlighting how it will transform the company’s operational model to foster agility and ambition. The proceeds from the sale will be utilized to reduce debts and further support other game franchises.

The newly established subsidiary will oversee the development teams for these popular titles, manage the existing catalog, and handle any upcoming game projects. The deal is anticipated to be finalized by the conclusion of 2025.

Additionally, the launch of Assassin’s Creed Shadows on March 20 received positive feedback from players and critics alike. Although specific sales figures were not disclosed, early reviews indicated a favorable reception, with the game surpassing previous installments. Ubisoft’s commitment to innovation and quality in game development continues to resonate with its audience, setting a promising trajectory for the company’s future endeavors.