Grand Tencent Auto? Tencent reportedly raising billions for acquisition of Take-Two Interactive or Electronic Arts

Tencent is looking to make a big investment in gaming. (Image Source: Jing Daily)
Tencent is looking to make a big investment in gaming. (Image Source: Jing Daily)
Tencent Holdings Limited is reportedly raising billions of dollars to acquire a US or South Korea-based gaming studio. Rumor is that the Chinese gaming major could be looking at acquiring Take-Two Interactive or Electronic Arts. There's also the other possibility that Tencent is raising funds to develop its own GTA competitor.

Tencent Holdings Limited is a major gaming and internet services conglomerate based in China. The company owns popular game developers such as Riot Games and has a 40% stake in Epic Games along with sizeable investments in major studios such as Ubisoft, Activision Blizzard, Bluehole, and more.

In 2020, Tencent had closed 300% more deals than it had in the previous year. However, Tencent does not seem to be content and is looking to acquire a major US or South Korean-based game studio.

This report comes via TMT Finance, which states that Tencent is "considering raising several billion dollars in a "club" loan deal and is holding talks with lending banks as the company looks at a potential acquisition of a gaming business" (via Seeking Alpha).

Apparently, Tencent hasn't zeroed-in on a studio yet, but rumor is that the Chinese gaming major is eyeing one among Take-Two Interactive (owners of Rockstar Games and 2K Games), Electronic Arts, and Zynga. Just last week, Tencent acquired a majority stake in Canadian studio Klei Entertainment, creators of the Don't Starve IP.

It is still not confirmed if Tencent would actually look to acquire Take-Two, EA, or any other game studio. The potential South Korean companies that Tencent may be interested in include Netmarble and Nexon. There is also word that Tencent is actually raising money to build a Grand Theft Auto (GTA) competitor and not acquire any company.

Take-Two Interactive and Electronic Arts have market capitalizations of US$24 billion and US$43 billion, respectively. Aquisition of either company by Tencent, which has a market cap of US$854.35 billion, can have far-reaching implications for the gaming industry.

In theory, even if the said companies do not want to get acquired, Tencent can still pursue a hostile takeover without needing the approval of the respective boards. Fans, though, seem to prefer Microsoft or Sony to pitch in if Take-Two or any other big studio is indeed up for sale.

It remains to be seen what Tencent's plans are but as Jez Corden from Windows Central opines, in an era of market consolidation, many studios can be expected to be sold out over the next couple of years.

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Vaidyanathan Subramaniam, 2021-01-25 (Update: 2021-01-26)
Vaidyanathan Subramaniam
Vaidyanathan Subramaniam - News Editor - 1286 articles published on Notebookcheck since 2012
I am a cell and molecular biologist and computers have been an integral part of my life ever since I laid my hands on my first PC which was based on an Intel Celeron 266 MHz processor, 16 MB RAM and a modest 2 GB hard disk. Since then, I’ve seen my passion for technology evolve with the times. From traditional floppy based storage and running DOS commands for every other task, to the connected cloud and shared social experiences we take for granted today, I consider myself fortunate to have witnessed a sea change in the technology landscape. I honestly feel that the best is yet to come, when things like AI and cloud computing mature further. When I am not out finding the next big cure for cancer, I read and write about a lot of technology related stuff or go about ripping and re-assembling PCs and laptops.