By Adria Calatayud


Ubisoft Entertainment shares climbed after the French videogame maker said it plans to carve out a unit that will house key franchises including Assassin's Creed with the backing of Chinese tech giant Tencent.

Tencent will invest 1.16 billion euros ($1.25 billion) for a stake of around 25% in a newly created subsidiary that will house Ubisoft's Far Cry and Tom Clancy's Rainbow Six brands in addition to Assassin's Creed. The deal values the unit at an enterprise value--including debt--of 4 billion euros, Ubisoft said.

Shares in Ubisoft jumped 9.1% to 14.09 euros in European morning trade on Friday, giving it a market capitalization of about 1.8 billion euros. This built on gains earlier this week following a positive launch for the latest installment of its Assassin's Creed franchise.

Ubisoft had been looking at strategic options for months, with its stock under pressure due to game setbacks, amid investor calls for the company to go private.

Twice in the past six months, the company delayed the release of "Assassin's Creed Shadows." It also cut its guidance in September. Even after Friday's rise, the stock remained down around 28% over the past year.

The corporate overhaul means the new unit will spearhead development for three of Ubisoft's largest franchises, with the aim of building multi-platform game ecosystems, while the company focuses on other titles with a strengthened balance sheet, it said.

Ubisoft said it will give the subsidiary an exclusive, irrevocable, perpetual license in respect of the intellectual property rights for Tom Clancy's Rainbow Six, Assassin's Creed and Far Cry in exchange for a royalty.

The transaction with Tencent is expected to be completed by the end of the year. The subsidiary will remain controlled and consolidated by Ubisoft after the deal, it said.

The move opens a new chapter in Ubisoft's history, co-founder and Chief Executive Yves Guillemot said. The company said it would provide more details on its future operating model at a later stage.


Write to Adria Calatayud at adria.calatayud@wsj.com


(END) Dow Jones Newswires

03-28-25 0603ET