Rumours that the Chinese internet behemoth Tencent was in talks to buy out the Supercell shares owned by Japanese telecoms group Soft Bank were confirmed Tuesday afternoon by Supercell chief executive Ilkka Paananen.
The deal saw Tencent fork out some 7.4 billion euros for SoftBank’s 73-percent stake in the Finnish game company. The purchase price reflected a market valuation of roughly nine billion euros for the hit-making game firm, making it the most expensive acquisition of a Finnish firm in the country’s history.
By Finnish standards, the price tag is exceptionally large – the only other business deal that bears comparison is Microsoft’s purchase of Nokia’s fading mobile phone division for 5.44 billion euros in 2013.
However the highest price paid by a Finnish company to acquire another company was recorded at the end of last year, when Nokia paid up some 15.6 billion euros for its French networks rival Alcatel-Lucent.
"This is clearly a major opportunity for Supercell. Before we were satisfied with 10,000 players, then we reached the 100-million-player milestone. It is quite clear that this marks the beginning of a new journey for Supercell. We have a new owner and an amazing window into the Chinese market," said Supercell CEO Ilkka Paananen.
Finnish roots still a central principle
Tencent is the world’s largest gamemaker as well as a major internet company. The firm owns Epic Games, a developer known for turning out a string of hit titles. Tencent’s game platforms reach up to one billion users and roughly 300 million players, and it employs more than 30,000 workers.
Paananen said that Supercell’s headquarters will remain in Finland, adding that the company’s Finnish roots have been a fundamental principle from day one.
"We have a huge opportunity for growth but at the same time we will preserve our independence and our values. Our headquarters will stay in Finland and we will pay our taxes in Finland," Paananen declared.
"Mikko [Kodisoja, co-founder] and I will keep our shares in the firm, at least initially. That won’t change," he observed.
Paananen noted that the search for a new owner and partner had been a long process that began during 2015, when SoftBank indicated that it needed to free up cash to finance the Japanese company’s transformation strategy.
"This has been a huge deal for us [the co-founders], as you can imagine. We thought long and hard about it."
Finland's top gamemaker in 2015
Paananen explained that as a result of different ownership arrangements, Tencent’s shareholding in Supercell will rise to an agreed maximum of 84 percent.
"It is difficult to say whether or not there will be any change in Finnish ownership in the future. Everything depends on what people decide," he remarked, referring to the fact that all of the company’s employees own shares in the business.
Earlier this year Supercell announced that it had earned revenues of 2.1 billion euros in 2015, up from 1.4 billion in 2014. Before tax profits came in at 848 million euros in 2015 and the company paid 176 million into state coffers as corporate taxes.
Supercell's strong financial performance in 2015 was backed by just three game titles — Clash of Clans, Hay Day, and Boom Beach. Earlier this year it launched Clash Royale, which went on to score early breakthroughs: the iPhone version of the new game quickly topped download charts in 94 countries and became the biggest earner in 52 markets.