Tencent agreed to buy video game maker Sumo Group for $ 1.27 billion

Chinese tech giant Tencent Holdings has agreed to buy UK video game company Sumo Group for $ 1.27 billion.

Sumo shareholders will receive $ 7.08 in cash per share, Tencent said. The offer is a 43% premium over the last closing Sumo price of $ 4.94. The share has risen several times since Sumo went public on the London Stock Exchange’s AIM market in 2017. This is one more sign of an acceleration in transactions in the gaming industry. The first half of 2021 has saw $ 60 billion in investments, acquisitions and public offerings in the gaming industry, according to Drake Star Partners.

Tencent had an 8.75% stake and is the second largest shareholder in the company, which has 14 studios in five countries and employs more than 1,200. The acquisition will have echoes in the United States, as Sumo Digital owns Pipeworks, based in Oregon, maker of Rival Peak. Pipeworks just opened a studio called Timbre Games in Vancouver.

“Sumo’s board of directors strongly believes that the company will benefit from Tencent’s vast video game ecosystem, proven industry expertise and strategic resources,” said Ian Livingstone, president of Sumo, in a statement.