Riot Games parent company Tencent to acquire major UK games developer

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Riot Games parent company Tencent is set to purchase one of the UK’s well-known game development studios.

Chinese gaming giant Tencent has made a bid worth almost £1bn to acquire Sumo Group, which owns Atomhawk, Pipeworks Studios and Secret Mode, as well as Sumo Digital, which consists of several UK studios including Sumo Nottingham and Sumo Sheffield.

Sumo Digital has produced a range of games over the years, including LittleBigPlanet 3, Sackboy: A Big Adventure, Crackdown 3, several Forza titles and most recently Hood: Outlaws & Legends. It has also been hired by and partnered with other game companies and devs, for example it has partnered with IO Interactive on the Hitman series.

Tencent already had a stake of around 8% in Sumo Group, and this latest proposal could see it take full ownership of the UK games company. The actual bid is $1.27bn (£919m).

Tencent has a stake in many games and esports businesses, including 100% ownership of League of Legends developer Riot Games, 40% in Fortnite dev Epic Games, 5% in Overwatch dev Activision Blizzard, 5% in Rainbow Six dev Ubisoft, more than 80% in Clash Royale dev Supercell and others.

“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.”

James Mitchell, Tencent

“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,” CEO Carl Cavers said in a statement, as reported by GamesIndustry.biz.

“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.”

James Mitchell, Tencent’s chief strategy officer, added: “Tencent is proud to have been an investor in Sumo since 2019, and we view the proposed combination as an evolution of our partnership. 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.”

Ian Livingstone, non-executive chairman of Sumo, commented: “The board of Sumo considers that the acquisition is in the best interests of all stakeholders in the company and intends to unanimously recommend this offer to shareholders. Tencent’s offer of 513p per share demonstrates the tremendous achievements of the management team, both financial and operational.”

Sumo Group employs more than 1,200 people worldwide across 14 studios. Earlier this year it was recognised as one of the Top 100 Large Best Companies to work for in the UK.

Earlier this year, EA purchased another UK-based developer: Codemasters.

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