Saudi Arabia’s wealth fund has made its second $1 billion foray into the Swedish gaming industry this year as part of a drive to build stakes in video game makers and e-sports firms globally.
The Public Investment Fund’s Savvy Gaming Group will become the second largest owner in Embracer Group AB after acquiring almost 100 million shares in the Karlstad-based company. The move follows a similarly sized acquisition in January, when Savvy bought the esports division of Modern Times Group at an enterprise value of $1.05 billion.
The PIF, as the $500 billion fund is known, continues to deepen its push into a gaming sector that continues to consolidate. Last month, the fund took a 5.01 per cent stake in Nintendo Co., marking its third investment in a Japanese games company.
The announcement of a rights issue directly to Savvy sent Embracer’s shares up nearly 10 per cent during early trading in Stockholm on Wednesday. As a result of the deal, PIF will take an 8.1 per cent stake in the Swedish company for 10.3 billion kronor ($1.05 billion). The price of 103.47 kronor per share represents a premium of 15 per cent from the closing price on June 7.
Embracer last month said it was in talks with potential long-term strategic investors. A rapid pace of acquisitions has helped the company become one of Europe’s largest gaming firms, and it is currently weighing a move to Nasdaq Stockholm’s main market to help broaden the investor base.
The relationship with Savvy will let Embracer set up a regional hub in Saudi Arabia from which it will be able to make investments in the region, Embracer’s CEO Lars Wingefors said in a statement. The proceeds from the share issue will be used to continue its acquisition strategy.