Tencent nears $6.6 billion deal to buy majority stake in Supercell: source

Thu Jun 16, 2016 6:30am EDT
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By Liana B. Baker and Yimou Lee

(Reuters) - Tencent Holdings Ltd (0700.HK: Quote) is nearing a $6.6 billion deal to buy a majority stake in Finland's Supercell Oy, a person familiar with the matter said, in what would be the biggest-ever purchase of a mobile games maker.

China's biggest social network and online entertainment company plans to buy the 73.2 percent stake in Supercell from Japanese media and telecoms company SoftBank Group Corp (9984.T: Quote), valuing the maker of the popular mobile game 'Clash of Clans' at more than $9 billion, the person said, declining to be identified because the matter was confidential.

Analysts said through the deal, Tencent could enhance research and development capability and boost revenue in the world's largest mobile gaming market.

China's mobile gaming revenue is likely to grow 17 percent this year to 60 billion yuan ($9.11 billion), accounting for nearly a quarter of the world's total, according to market researcher TrendForce.

Known for investing in game developers through partnerships and minority stakes, Tencent owns 'League of Legends' developer Riot Games and has a stake in Activision Blizzard Inc (ATVI.O: Quote), the owner of the 'Call of Duty' franchise.

Last year, it bought a 15 percent stake in mobile game developer Glu Mobile Inc (GLUU.O: Quote), which developed the 'Deer Hunter' and 'Kim Kardashian: Hollywood' games, for $126 million in a move to expand in the U.S. gaming market.

Tencent's purchase of Supercell would surpass the previous record gaming acquisition in November, when Blizzard paid $5.9 billion for 'Candy Crush Saga' creator King Digital Entertainment.

"Tencent has weaker research and development capability and such a deal could help enhance it," said senior director of TrendForce Jeter Teo.   Continued...

Dancers perform underneath the logo of Tencent at the Global Mobile Internet Conference in Beijing May 6, 2014. REUTERS/Kim Kyung-Hoon/File Photo