Starbreeze, which is currently fighting to stay afloat, had owned a 91.82 per cent stake in Dhruva. The purchase sees the Swedish publisher selling the Bangalore-based studio for less than the $8.5m it had spent on the acquisition back in December 2016.
The deal with Rockstar is expected to close by the end of June.
Founded in 1997, Dhruva is a developer and art production studio that now employs nearly 300 staff.
The company has worked across mobile, console and PC platforms on projects such as Dawn of Titans, Agent Alice, Halo 5, Sea of Thieves, Forza Motorsport 7
It will continue work on existing client projects following the acquisition, while also working with Rockstar India, which already employs 500 people.
Dhruva founder and CEO Rajesh Rao will work with Rockstar “in the near term” to support the transition.
“Rockstar Games are the undisputed leaders of innovation and creativity in modern games development,” said Rao.
“Dhruva Interactive was founded with the aim of creating a world-class games development community in India, and so bringing the Dhruva team under the Rockstar Games label is further proof that we have succeeded in creating a talented team that can contribute to the best games in the world while helping to create a thriving local games developer community in India.”
Rockstar India studio manager Daniel Smith added: “Dhruva Interactive has been a beacon of Indian games development for decades and we are excited to bring them into the Rockstar family.
“The addition of the Dhruva team to the existing talent at Rockstar India will expand the studio’s capabilities and reinforces our belief in and commitment to the local development community.”
The sale of Dhruva will help Starbreeze make up for the $17.4 million losses it accrued during the last quarter ending March 31st. The Swedish publisher had stated it could close as early as next month without new funds.
"Starbreeze and some of its subsidiaries have been in reconstruction since December 3rd 2018," the company wrote.
"The company currently lacks sufficient secured funds to guarantee continued operations for the next 12 months and is expected to have a liquidity shortfall before mid-year 2019 if no additional funds are provided. These conditions indicate that there are significant uncertainties that can lead to significant doubts about the company's ability to continue its business."