By Raju Shekhar
Chinese Internet firm Tencent has acquired a majority stake in US online game developer Riot Games. Just two week ago, Tencent had announced that it was planning to launch a $760 million fund to invest in such companies. Tencent is one of the leading online game companies in China.
The company yesterday released a statement saying that it will provide financial backing as the American firm expands into new markets and develops games. “I expect to continue to see Chinese companies look at cross-border deals as they look beyond their domestic markets for growth and opportunities,” said Joe Steger, global technology transactions leader at Ernst & Young LLP in San Jose, California, to Bloomberg.
Both companies preferred not to reveal the financial terms of the agreement. It s expected that more details will emerge later as the deal is subject to regulatory approval. "Tencent's investment will provide our talented team... with additional resources to focus on innovating around League of Legends and launching new projects that push the boundaries in the gaming space," Riot Games chief executive Brandon Beck said.
In 2008, Tencent obtained the Chinese rights to League of Legends -- a free multiplayer online battle-arena game. The statement added that this year the company is planning to test its potential in the world's biggest Internet market of 457 million users. Last month, Tencent announced its plan to launch a five-billion-yuan fund to invest in online gaming, e-commerce and new media companies. Tencent did not reveal that whether it would use the investment fund to finance the Riot Games deal.
