Dividends and Chinese tech giant Tencent increases its stake in Ubisoft

If you think about the movie industry, new films are released and many people around the world go to movies. If you think about the gaming industry, the industry is larger than the movie industry.

In an article by Mathieu Rosemain and Tassilo Hummel of Reuters, Chinese tech giant Tencent is increasing its minority stake in Ubisoft. The deal values Ubisoft at $13 billion.

Ubisoft’s most popular games are Assassin’s Creed and Tom Clancy’s video game franchises.

Tencent’s investment in Guillemot Brothers Ltd. which owns the bulk of the family’s 15% stake in Ubisoft. Tencent has the right to increase its stake from 9.99% from 4.5%. There will be a tie up for 5 years, if Tencent wishes to sell, the Guillemont family to buy the shares.

Linking to dividend paying stocks, it is not surprising large companies continue to grow because they have the ability to partner with other profitable companies and hopefully can offer customers a good reason to stay within their orbits. At some point in time, to play Ubisoft games in China will mean some link to Tencent and the profits will stay within their orbit.

There are more questions than answers, till the next time – to raising questions.

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