In a press release from earlier today, Ubisoft announced the founding of a new subsidiary for its flagship titles. It will focus on the development of games from the Rainbow Six Siege (so not the whole Tom Clancy series), Assassin's Creed and Far Cry franchises. This will allow the rest of the studios to focus on other projects.

This change comes with a 1.16 billion euros investment form Tencent, which will also get a 25% share in the subsidiary. We'll have to wait and see what this means for the future of these series, as well as what the rest of Ubisoft will do with its other IPs. The transaction and rollout of the new subsidiary is expected to be done by the end of the year.

Quote From Ubisoft

PARIS – March 27, 2025 – Today, Ubisoft announced that it is accelerating its transformation by taking
an important step in rapidly evolving its operating model with the creation of a dedicated subsidiary
based on its Assassin’s Creed®, Far Cry®, and Tom Clancy’s Rainbow Six® brands. Following the formal
and competitive selection process initiated by the Group earlier this year, Tencent’s will invest €1.16bn
for a minority stake in the new subsidiary. This new subsidiary will focus on building game ecosystems
designed to become truly evergreen and multi-platform. Backed by greater investment and boosted
creative capacities, it will drive further increases in quality of narrative solo experiences, expand
multiplayer offerings with increased frequency of content release, introduce free-to-play touchpoints,
and integrate more social features.
This transaction values the entity at a pre-money Enterprise Value of c.€4bn, implying a FY23-FY25E
average sales multiple of around 4x. It highlights the strong value of Ubisoft’s IPs, significantly reinforces
its balance sheet, and enables the company to continue its efforts to become a more agile organization,
unleash the full creative potential of its teams and better align its resources with the constantly evolving
expectations of players.
The binding agreement with Tencent follows the formal and competitive process in exploring and
assessing different strategic options announced earlier this year. Based on the careful consideration of
several expressions of interest received from diverse parties, and its duty to act in the best interests of
all Ubisoft stakeholders, the Board of Directors, upon recommendation from the ad hoc Committee,
determined that this transaction crystalized the best value for Ubisoft’s assets and unanimously approved
the proposed transaction on March 27, 2025. The Board of Directors has, upon ad hoc Committee
recommendation, appointed Finexsi acting as independent expert in view of the issuance of a fairness
opinion.
In parallel to the creation of this new entity, Ubisoft will focus on nurturing the development of iconic
franchises including Tom Clancy’s Ghost Recon® and The Division®, accelerating the growth of top
performing titles and leveraging disruptive technologies on selected new IPs, while continuing to deliver
state-of-the-art production game engines and online services. More details on the Group’s future
operating model will be shared at a later stage.
“Today Ubisoft is opening a new chapter in its history,” said, Yves Guillemot, Co-Founder and Chief
Executive Officer. “As we accelerate the company’s transformation, this is a foundational step in changing
Ubisoft’s operating model that will enable us to be both agile and ambitious. We are focused on building
strong game ecosystems designed to become evergreen, growing high-performing brands and creating
new IPs powered by cutting-edge and emerging technologies.”
“With the creation of a dedicated subsidiary that will spearhead development for three of our largest
franchises and the onboarding of Tencent as a minority investor, we are crystalizing the value of our
assets, strengthening our balance sheet, and creating the best conditions for these franchises’ long-term
growth and success. With its dedicated and autonomous leadership team, it will focus on transforming
these three brands into unique ecosystems.”
Guillemot concluded, “We are committed to building a sharper, more focused organization-one where
talented teams will take our brands to the next level, accelerate the growth of emerging franchises, and
lead innovation in next-generation technologies and services, all with the goal of delivering enriching,
memorable games that exceed players' expectations, and create superior value for our shareholders and
other stakeholders.”
Martin Lau, President of Tencent, said “We are excited to extend our longstanding partnership with
Ubisoft through this investment, which reflects our continued confidence in Ubisoft’s creative vision and
exceptional talent to drive sustained success in the industry. We see the immense potential for these
franchises to evolve into long-term evergreen game platforms and create engaging new experiences for
gamers.”
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Relationship between the new subsidiary and Ubisoft Entertainment:
o The new subsidiary would include the teams developing the Tom Clancy’s Rainbow Six, Assassin’s
Creed and Far Cry franchises based in Montréal, Quebec, Sherbrooke, Saguenay, Barcelona, and
Sofia as well as the back-catalog and any new games currently under development or to be
developed.
o The new subsidiary would be granted by Ubisoft a worldwide, exclusive, irrevocable, perpetual
license in respect of the intellectual property and similar proprietary rights owned or licensable
by Ubisoft in relation to Tom Clancy’s Rainbow Six, Assassin’s Creed and Far Cry in exchange for
a royalty.
Main terms of the binding agreement with Tencent:
o Tencent would invest in the new subsidiary which is headquartered in France and 100% owned
by Ubisoft immediately prior to the transaction. Specifically, at closing of the transaction, Tencent
would invest a total amount of EUR1.16bn for an approximate 25% economic interest in the New
subsidiary, that will be used to strengthen Ubisoft’s balance sheet by significantly reducing its
consolidated net debt position, accelerate the Group’s transformation, and sustain growth of
selected franchises. After closing of the transaction, the new subsidiary would remain exclusively
controlled and consolidated by Ubisoft.
o Conditions precedent to the transaction:
− Issuance of a fairness opinion from Finexsi acting as independent expert
− Completion of the carve-out to create the new subsidiary
− Obtention of the necessary regulatory clearances
Ubisoft can unilaterally waive the issuance of the fairness opinion as a condition precedent.
o Completion of the transaction is expected before the end of 2025.
o The new subsidiary would have a dedicated leadership team, supervised by a Board of Directors,
focused on enhancing creative vision and streamlining operations, with the authority to make
swift, high-impact decisions across development, marketing, and distribution, to ensure these
brands continue to evolve, attract new audiences, and deliver groundbreaking gaming
experiences for years to come.
o Tencent would benefit from customary minority protection veto rights as well as certain consent
rights on the disposals of the important new subsidiary assets
o Other provisions in relation to Tencent’s shareholding in the New subsidiary notably include:
o A 5-year lock-up undertaking on New subsidiary shares held by Tencent, unless Ubisoft
no longer owns a majority of New subsidiary voting rights and share capital
o Ubisoft may not cease to hold a majority of New subsidiary voting rights and share capital
for a 2-year period
o Customary share transfer provisions, including, a right of first refusal to the benefit of
Ubisoft, a right of first offer to the benefit of Tencent, tag-along right to the benefit of
Tencent, and drag-along right to the benefit of Ubisoft (subject to certain conditions)
o Call option to the benefit of Ubisoft and put option to the benefit of Tencent in the event
of certain change of control of Ubisoft approved by its Board of Directors – [Exercise
price will be the higher of (i) the fair market value of New subsidiary shares and (ii) the
same EBIT multiple as that in the change of control transaction of Ubisoft; it being
specified that for the call option there will be a specific minimum price protection during
the first 4 years following closing of the transaction with Tencent.

What do you think of this new development? How do you expect this to affect the future of Ubisoft? Let us know in the comments below!