Video game

US Government Investigates Tencent's $1.3B Acquisition of British Videogame Maker –

The Committee on Foreign Investment in the United States (CFIUS) is investigating Chinese multinational technology conglomerate Tencent Holding’s $1.27 billion proposed takeover of British videogame maker, Sumo Group plc.

Both Tencent and Sumo are working with CFIUS for clearance on its deal.

Tencent, advised by Davis Polk & Wardwell, made a deal to acquire the entire share capital of Sumo via an indirect subsidiary, Sixjoy Hong Kong Limited. Tencent already owns almost 10% of Sumo, after a share acquisition deal closed in 2019, a transaction also advised by Davis Polk.

The CFIUS-related advice on the deal is being led by Davis Polk’s U.S.-based head of economic sanctions and national security practice, John B. Reynolds II. The partners leading on the commercial parts of the acquisition are London partner Simon Witty and Hong Kong partner Mirando So.

Sumo is listed on the Alternative Investment Market of the London Stock Exchange. It has studios in the U.S. including its Oregon-based Pipeworks Studios, and outfits in four other countries including India and Canada.

The Allen & Overy team on the acquisition is led by its Sumo relationship partner Claire Coppel in London. Partner Philip Mansfield is advising on antitrust issues.

The cash consideration that was payable by Sixjoy was to be be funded from existing cash resources of Tencent.

The deal in July was agreed days after the Chinese government blocked the merger between domestic videogame streaming firms Huya and DouYu, citing antitrust concerns.


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