Tencent buys UK games company Sumo for £919m

Sheffield-based developer is behind ‘Forza’ and ‘Hitman’ franchises

Tencent has struck a £919 million (€1 billion) deal to buy the UK games developer Sumo Group, as the Chinese tech company continues its years-long international gaming acquisition spree.

Sumo, which was founded in Yorkshire in 2003, has developed games for Sony, Microsoft and Sega including instalments of the Forza, Hitman, Sonic and LittleBigPlanet franchises.

Consolidation has been accelerating in the video games industry, as console-focused publishers snap up mobile app developers and larger platform owners try to secure exclusive content.


Tencent’s offer of 513p per share in cash, via its subsidiary Sixjoy Hong Kong, comes at a 43 per cent premium to Friday’s closing share price. Shares in Sumo jumped to 508p in early trading on Monday morning in London.


“The board of Sumo firmly believes the business will benefit from Tencent’s broad videogaming ecosystem, proven industry expertise and its strategic resources,” said Ian Livingstone, the UK gaming veteran who serves as Sumo’s chair.

If approved by shareholders, the deal would be another example of overseas buyers taking over part of the UK's flourishing games development industry, after California-based Electronic Arts closed its £945 million acquisition of Codemasters in February.

Tencent, the Shenzhen-based owner of WeChat, took a minority stake in Sumo in November, 2019, now worth 8.75 per cent of the company. Its portfolio of games companies already includes Supercell, the Finnish makers of Clash of Clans, and US-based League of Legends developer Riot Games, as well as minority stakes in Activision Blizzard, Epic Games, Voodoo, Frontier Developments and Ubisoft.

The move for Sumo comes at a time when regulators in both the US and China – the world’s two largest games markets – have been bringing Tencent’s investments and acquisitions under closer scrutiny, as part of broader crackdowns on Big Tech and Chinese companies’ overseas dealmaking.


Sumo went public on London’s Aim at 100p a share in 2017, just over a year after it was acquired by private equity firm Perwyn. The company has 1,200 staff across 14 studios in five countries, including in India and Poland as well as around the UK.

Perwyn, which owns about 17 per cent of Sumo, said it would recommend the Tencent offer.

Ahead of Monday’s announcement, Sumo’s share price had more than doubled since the pandemic began, as lockdowns gave a broad boost to the gaming industry.

However, the shares have risen by only 7 per cent so far this year, with gaming growth appearing to slow as lockdowns are lifted. Last week, figures from NPD Group showed that overall consumer video game spending in the US grew 15 per cent year on year in the first half of 2021, compared with 27 per cent growth for 2020 over the previous year, with growth of just 1 per cent in software and content sales in June 2021.

Goldman Sachs and Zeus Capital advised Sumo on the deal. – Copyright The Financial Times Limited 2021