It is claimed that the Chinese megacorp is set to shift its M&A strategy to focus on "buying majority stakes mainly in overseas gaming companies."
Chinese tech giant Tencent is reportedly seeking to shift its merger and acquisitions strategy to focus on "buying majority stakes mainly in overseas gaming companies."
As reported by Reuters, the Chinese megacorp traditionally acquired minority stakes and stayed invested as a "passive financial investor." However, now it plans to "aggressively" look for majority or even controlling stakes in overseas companies, mainly, in the "core gaming sector."
According to sources familiar with the matter that Reuters cites, the company is also set to snap up global metaverse assets. Particularly, it is said to be looking at European companies that are working on the metaverse.
As Reuters reported, this shift is in part due to Tencent's attempt to cope with the slowing growth in its home country of China caused by regulatory issues.
Tencent, however, said in response that it had changed its M&A priorities "long before any new regulations" in China. It also added that it looks for "innovative companies with talented management teams" giving them room to grow independently. The company didn't elaborate on this statement.
Three out of four Reuters' sources also added that Tencent's decision to pursue bigger stakes in gaming firms also comes as other tech giants including Microsoft, Sony, and Amazon are snapping up gaming assets and related intellectual properties.
Part of Tencent's new plan is already seen in its recent investment – the Chinese company invested €300 million in Guillemot Bros, the company run by Ubisoft’s co-founders that has the largest stake in Ubisoft, and now owns a 49.9% stake in the firm.
Tencent also has stakes in Epic Games, Activision Blizzard, FromSoftware, and Krafton and owns 100% of Riot Games, Sumo Digital, and Warframe developer Digital Extremes.
You can learn more about Tencent's new strategy by reading Reuters' report here. Also, don't forget to join our Reddit page and our Telegram channel, follow us on Instagram and Twitter, where we share breakdowns, the latest news, awesome artworks, and more.