Posts like this will soon be the norm, as yet another Chinese acquisition has taken place. As some of you know, Tencent, a leading Chinese technology firm (mainly known for QQ and WeChat), has agreed to purchase Supercell for $8.6B from Japanese firm Softbank. Supercell is perhaps best known as the mobile gaming giant behind its flagship product Clash of Clans.
Supercell, SoftBank Group Corp, and Tencent Holdings Limited today announced the signing of a
definitive agreement pursuant to which a consortium established by Tencent (the “Consortium”) will
acquire up to 84% of Supercell in a transaction valuing the Company at an equity value of approximately
USD 10.2 billion1 (approximately JPY 1.1 trillion
Following the closing, Tencent currently expects to maintain a voting interest of 50% in the Consortium
Morgan Stanley served as the financial advisors for Supercell, The Raine Group for Softbank, and Bank of America Merrill Lynch for Tencent.
This deal is important for quite a few reasons. First and foremost, it is another case of China expanding its horizons beyond its borders in an attempt to transition into the 'New Economy' which is largely services and technology based. Just yesterday, UFC was said to be taken over by a consortium of investors made up of Chinese firms. Furthermore, the insanely popular app WeChat will most likely find a way to closely integrate mainstream western mobile gaming within its distribution channel (approx. 700m active monthly users).
In the first half of 2016 alone, Chinese outbound M&A deals exceeded $111.6B (the 2015 total was $111.5B). Given China's incredible appetite for overseas assets, can anyone suggest changes within the dynamics of investment banking? Perhaps a shift from Singapore towards Shanghai? Will deals like Tencent and Supercell affect other markets (e.g NY, London)? Please let me know what you think.
http://www.softbank.jp/en/corp/set/data/news/press/sb/2016/20160621_02/pdf/20160621_02.pdf
