Tencent buying UK studio Sumo Group for $1.3 billion

Tencent is on track to buy games studio Sumo Group for $1.27 billion, the companies have revealed.

Founded in 2003 and headquartered in Sheffield, the developer is best known for its work-for-hire projects including Crackdown 3 and Sackboy: A Big Adventure - for which it won two BAFTAs. Some of the studio’s other hit titles include Little Big Planet 3, Little Orpheus, Team Sonic Racing and Hood: Outlaws and Legends.

The company maintains 14 studios spanning five countries and employs more than 1,200 staff.

Sumo went public via the London Stock Exchange in 2017 and Tencent’s offer will see Sumo shareholders receive $7.08 (£5.13) per share, an offer that is a 43 per cent increase on Sumo’s previous closing price. Tencent purchased a stake in Sumo for $30 million in 2019 and currently is the second biggest stakeholder in the company.

The move comes after Sumo Group saw a 41 per cent increase in sales for 2020, bringing in $95 million.

"Committed investor"

"The three founders of Sumo, who work in the business, Paul Porter, Darren Mills and I are passionate about what we do and are fully committed to continuing in our roles," Sumo Group CEO Carl Cavers said in a statement.

"The opportunity to work with Tencent is one we just couldn't miss. It would bring another dimension to Sumo, presenting opportunities for us to truly stamp our mark on this amazing industry, in ways which have previously been out-of-reach."

Tencent chief strategy officer James Mitchell added that: "We hold Sumo's team and the games they produce in high regard, and its strategy and spirit of innovation have underpinned the success of the business over many years.

"Tencent intends to bring its expertise and resources to accelerate the growth of Sumo both in the UK and abroad, supporting Sumo in the market for top-notch creative talent, and the UK as a hub for game innovation. We believe the proposed transaction benefits all stakeholders, delivers compelling value for Sumo shareholders while enhancing the Sumo business for the future."

The acquisition will be the latest from Tencent, which own stakes in several big-name game companies such as Activision Blizzard, Epic, Riot Games and Ubisoft. 

Tencent shows no signs of slowing down with a reported $19.5 billion in profit for 2020.