US security panel probes £919m Chinese takeover of Sheffield games firm Sumo

A US national security panel is investigating Tencent Holdings' £900m takeover of Sheffield videogame maker Sumo Group.

Monday, 1st November 2021, 12:44 pm

Sumo said Tencent had agreed to offer undertakings to gain approval from the Committee on Foreign Investment in the United States which assesses deals to ensure they do not hurt national security.

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Reuters reports that the secretive task force tightened its scrutiny of Chinese deals under former President Donald Trump. It is also looking into the US sale of video-sharing app TikTok.

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Sumo, which is headquartered in Sheffield, which has 14 studios in the United States and four other countries and more than 1,200 employees.

Sumo, which is headquartered in Sheffield, has 14 studios in the United States and four other countries and more than 1,200 employees.

Tencent announced the deal with Sumo in July.

In announcement to the London Stock Exchange, Sumo said: “Tencent and Sumo are actively engaging with CFIUS with the aim of obtaining clearance before the end of the year.”

Sumo Digital’s clients and partners include Microsoft’s XBOX game studios, Apple Inc and Google, among others.

The deal would bring together the company’s racing and snooker games - including A Big Adventure, Crackdown 3, Forza Horizon 2, LittleBigPlanet 3, Disney Infinity and Team Sonic Racing - with Tencent's more high-profile range that includes the mobile version of Call of Duty.

In March, the Brightside based company said turnover in 2020 was up 40 per cent to £68.9m.

Tencent first invested in Sumo in 2019 when it was valued at £248m.

Tencent is the world's largest video game company in terms of revenue, with significant stakes in western video game publishers such as League of Legends maker Riot, Clash of Clans studio Supercell, and Fortnite developer Epic Games.

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