Ubisoft’s $4 billion carveout sells Tencent a 25 percent stake in some of its biggest games

Ubisoft is spinning off Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six into a subsidiary backed by Tencent, according to an announcement on Thursday. The Chinese gaming giant will invest €1.16 billion (~$1.3 billion) for a 25 percent stake in the carveout, which will have a total value of about €4 billion (~$4.3 billion).

Ubisoft says the new entity will include the teams working on all three franchises, along with the publisher’s back catalog of games and new titles currently in development. It will work to improve the “quality of narrative solo experiences,” as well as “expand multiplayer offerings with increased frequency of content release.”

Last year, Bloomberg reported that Tencent, which currently has a 10 percent stake in Ubisoft, was considering a buyout of the French game publisher. Ubisoft responded by saying it “regularly reviews all its strategic options.” The deal is expected to close this year.

“With the creation of a dedicated subsidiary that will spearhead development for three of our largest franchises and the onboarding of Tencent as a minority investor, we are crystalizing the value of our assets, strengthening our balance sheet, and creating the best conditions for these franchises’ long-term growth and success,” Ubisoft co-founder and CEO Yves Guillemot, says in the press release.