Tencent Holdings is investing in films, using its online games and other assets to gain an edge in the film industry. (Photo : Reuters)
Chinese Internet company Tencent Holdings has agreed to buy a 14.6-percent stake in Glu Mobile, the Freemium Game Developer behind the successful Diner Dash, Deer Hunter 2014 and Kim Kardashian Hollywood games franchises.
Tencent is paying $6 per share for its acquisition in Glu Mobile. This amounts to $126 million for 21 million shares, or 14.6 percent of the company. The Head of Tencent's Interactive Entertainment Group, Steven Ma, joins the Glu Mobile board of directors as part of this deal.
"Tencent was attracted to Glu due to its five-year growth track record, high-quality entrepreneurial management, and unique approach to methodically building a portfolio of success in the shooter, action-RPG, narrative-RPG, time-management, sports and racing genres," Ma explained.
Due to this announcement, Glu Mobile's stock went up to $6.76, up from $5.38 when it announced its Q1 results last Wednesday, where it posted a profit of $2.1 million.
Part of the Chinese Big Three of Internet companies, Tencent (together with Baidu and Alibaba) is known for investing heavily in new companies in order to catch the latest trends. Unlike Baidu and Alibaba, Tencent focuses many of its investments in gaming companies, as online gaming has traditionally been a large part of its revenue.
Glu Mobile has announced that it will be creating a mobile game with pop icon Britney Spears for release in 2016.
Glu Mobile's CEO, Niccolo de Masi, has not issued any statement on the deal. However, it is expected that the deal will help Glu Mobile expand into the Chinese gaming market, which is projected to overtake the U.S. gaming market in 2015.
