Deal

The wild wild east: Chinese construction company spends $960 million on Family Farm publisher DianDian

FunPlus reboots for more adventures

Date Type Companies involved Size
August 19th, 2014 acquisition FunPlus
Zhongji Holding
$960m
The wild wild east: Chinese construction company spends $960 million on Family Farm publisher DianDian

[Updated: It's since become clear that Zhongji Investment is looking to raise $1.4 billion via a private placement of new shares to buy DianDian, as well as another unnamed games company and an unnamed film production company.

If you want to know how different the Chinese mobile game market is to the west, FunPlus' announced deal provides a classic example.

While being based mainly in China, the casual social game publisher has focused on western markets for its games such as Family Farm, which it has since bought to mobile.

The game, which supports 16 languages - is successful with 4 million players a day, but as yet the company hasn't yet proven itself to be able to launch new mobile-first IP.

Nevertheless, a publicly traded building construction company called Zhongji Holding or Shanghai Zhongji Investment Hldg Co Ltd (SHA:600634) says it will buy FunPlus' DianDian subsidiary, which has 120 staff, for up to $960 million; an eye-watering amount.

The deal won't be completed until 2015, however, and will have to pass regulatory approvals.

New horizons

FunPlus, which also has offices in Vancouver and San Francisco, says the deal will allow it to reposition itself, with the new investment enabling it to expand globally and in China.

Notably, it says it will "aggressively focus on talent acquisition, as well as great technology, content, and platform investments ," meaning the $960 million will be spent acquiring other companies.

"The mobile market in Asia, and especially in China, will be a massive driver of growth for our industry," said FunPlus' CEO Andy Zhong.

"We believe it will grow exponentially, and that Chinese public market investors will highly value innovative gaming and entertainment companies with global vision."

You can check out our video interview with Zhong at this years GMIC conference in Beijing.

Behind the scenes

Of course, this sort of deal does raise some interesting questions.

Why would a construction company want to buy a games company, and how has it raised the required $960 million?

Yet, this sort of deal has been happening more and more frequently in China over the past 12 months, with the likes of industrial flooring and umbrella companies raising cash to 'buy' game companies.

In most case, it's thought that the deals are actually reverse takeovers, which allow the games companies to more easiest and quickly list on Chinese stock exchanges.


Contributing Editor

A Pocket Gamer co-founder, Jon is Contributing Editor at PG.biz which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.

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