Saudi PIF invests $1 bn in Sweden’s Embracer in another gaming bet
Saudi Arabia’s Public Investment Fund (PIF) is continuing to bet on the gaming sector with at least its third big-ticket deal so far this year.
The sovereign wealth fund has acquired a stake valued at $1.05 billion, or 10.3 billion Swedish kroner, in Swedish gaming company Embracer Group.
Embracer said PIF’s gaming arm, Savvy Gaming Group, is buying 99.9 million Class B shares of the company at a price of 103.47 Swedish kroner apiece.
“Savvy Gaming Group’s investment of $1 billion enables us to continue executing our strategy proactively from a position of strength across the global gaming industry,” said Lars Wingefors, founder and chief executive of Embracer in a statement on Wednesday.
“Our relationship with Savvy Gaming Group will enable us to set up a regional hub in Saudi Arabia, from which we will be able to make investments across the Middle East and North Africa region, either organically, via partnerships, joint ventures, or via acquisitions of companies led by strong entrepreneurs,” Wingefors said.
The Swedish company said it will use the money raised from the stake sale to strengthen its financial position, enabling it to continue its acquisition strategy by complementing existing operations with new game publishers, game development studios or other assets.
Embracer had last year acquired Israeli gaming company CrazyLabs. It had also bought three Danish studios, two Swedish studios, a French company and a Dutch company.
PIF had launched Savvy Gaming in January after acquiring ESL Gaming in a $1.05 billion cash deal. Along with ESL, it had also acquired gaming company FACEIT. The two deals were reportedly cumulatively valued at $1.5 billion. The two companies were merged to create ESL FACEIT Group under Savvy Gaming, PIF had said at the time.
In February, PIF acquired a 5% stake each in Japanese gaming companies Nexon and Capcom. At the time, its stkae in Nexon was valued around $883 million while its holding in Capcom was worth $332 million.
The Saudi investor, which has been going long on gaming, with bets on majors like Activision Blizzard had said that its purpose behind the investment was “pure investment”.
Nexon is behind role playing games like MapleStoey and Dungeon & Fighter. Its titles are popular in South Korea, and it also has a tie up with the directors of the Avengers movies, to make games themed on their movies.
Apart from a significant minority stake in Activision Blizzard, which was acquired by Microsoft for $68.7 billion, PIF also owns shares in Electronic Arts Inc and Take Two Interactive Software, which had acquired Zynga for $12.7 billion.
PIF’s move to diversity into the gaming industry is part of Saudi Arabia’s efforts to diversify its economy away from oil and gas and into new-age tech businesses. This comes even as foreign investors are taking a keen interest in Saudi gaming startups.