China’s Internet giant Tencent Holdings Ltd. is in discussion with Softbank Group and plans to buy the majority stake from a Japanese telecommunications company Softbank Group Corp., who raised their stake up to 73% shares in Supercell Oy last year. Supercell Oy is a Finland-based mobile game development company found in 2010 that created four major popular mobile games -“Hay Day”, “Clash of Clans”, “Boom Beach” and “Clash Royale”- which was value at around $5.25 billion in 2014.
Japanese mobile outfit Softbank initially purchased 51% stake in Supercell for $1.5 billion in October 2014, and then became Supercell’s sole external shareholder in June 2015 because of its raised stake of 73% in Supercell. Under Softbank's ownership, Supercell has largely operated as an independent studio, and following its sale in 2014 company CEO Ilkka Paananen explained the studio was "still in full control of our future and will continue to operate independently." Supercell’s recent new released game “Clash Royale” was the world’s top-grossing mobile game in this March and generated revenue of more than $80 million, according to Newzoo.
Tencent is a global leader in PC games, which its holdings in games include the wholly owned “League of Legends” maker Riot Games, 14.6% in Glu Mobile and Miniclip, which was Tencent’s first gaming investment in Europe. (Undisclosed percentage, made in February 2015). Tencent is still developing its overseas profile through alliances and acquisitions prepared by its raising about $4 billion loans.
If this takeover plan succeeds, the Chinese firm will have to meet recent valuations of around $5.5 billion to pry Supercell away from Softbank. The deal will also boost a larger foothold for Tencent into the global mobile games market and accordingly promote Supercell’s games in China. Supercell would then be added to Tencent's impressive list of subsidiaries, which includes League of Legends creator, Riot Games, and mobile messaging service, WeChat.