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Tencent to buy Crackdown and Sackboy developer Sumo in $1.3bn deal

The developer commits to work-for-hire projects

Tencent is set to buy Sumo Group in a deal worth $1.27bn (£919m), the companies have announced.

The offer will see its shareholders received 513 pence per share, which is a 43% increase on Sumo's last closing price (358 pence).

Tencent already owns an 8.75% stake in the UK games developer, which work includes the recent BAFTA winning Sackboy: A Big Adventure for Sony and Crackdown 3 for Microsoft. Although Sumo does develop its own IP, it is best known for its work-for-hire projects, which will continue under the new ownership.

The cash acquisition will go through Tencent's wholly owned subsidiary Sixjoy Hong Kong Limited.

If agreed, Sumo will be the latest public UK games company to be bought for over $1bn, following EA's acquisition of F1 developer Codemasters earlier this year.

"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.

"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 has a strong track record for backing management teams and their existing strategies. Alongside the acceleration of own-IP work, Tencent has demonstrated its commitment to backing our client work and has stated its intention to ensure that we have the necessary investment to continue focusing on work with our key strategic partners on turn-key and co-development projects"

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 is a committed investor in the game industry, with a track record of supporting the growth of game studios around the world. 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."

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