Tencent Set to Acquire NEXON Valued at $15 Billion

Tencent’s Potential Acquisition of NEXON: What You Need to Know

According to a recent Bloomberg report, Tencent, the Chinese technology powerhouse, has initiated discussions to acquire NEXON, a notable player in the gaming sector.

NEXON: A Brief Overview

NEXON was initially established in South Korea in 1994, relocating its headquarters to Tokyo in 2005. The company is renowned for its successful franchises, which include MapleStory, Mabinogi, Vindictus, and the highly profitable Dungeon Fighter Online. As of 2023, this last title stands out as one of the highest-grossing gaming franchises worldwide, amassing over $22 billion in revenue.

The Valuation and Potential Deal Structure

Currently, NEXON’s market value is approximately $15 billion. This figure poses no significant hurdle for Tencent, which boasts a valuation exceeding $600 billion. Reports indicate that Tencent has reached out to the family of the late NEXON founder, Kim Jung-ju, who tragically passed away on February 28, 2022. Concerns surrounding the future of NEXON have prompted Kim’s family to consult with advisers and explore potential options.

The family’s stake in NEXON is held through their investment firm, NXC Corp., which, together with its subsidiary NXMH BV, controlled approximately 44.4% of NEXON as of June 30. Importantly, Kim’s wife and daughters collectively own around 67.6% of NXC. Despite the discussions, it is essential to note that no deal is guaranteed, and aspects of the transaction remain uncertain.

Tencent’s Expanding Gaming Portfolio

Tencent has a well-established record in the gaming industry, marked by numerous investments and acquisitions. Their portfolio includes complete ownership of several game development companies, such as Riot Games, Grinding Gear Games, Sharkmob, Funcom, Sumo Group, and Leyou. Just recently, Tencent made headlines by acquiring a 15.75% stake in Arrowhead Studios, the studio behind Helldivers 2.

The potential acquisition of NEXON could be a strategic move for Tencent, further solidifying its dominant position in the global gaming market. As developments unfold, industry observers will be keenly monitoring the situation.

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