By Paul Carsten, Jussi Rosendahl and Ritsuko Ando
BEIJING/HELSINKI/TOKYO (Reuters) - China's biggest gaming group Tencent Holdings Ltd (HK:0700) is to buy a majority stake in 'Clash of Clans' mobile game maker Supercell from SoftBank Group Corp (T:9984) in a deal valued at roughly $8.6 billion.
The purchase will expand Tencent's interests overseas, as the Chinese video game and social network group still relies mainly on its home market even though it has stakes in various foreign studios like Epic Games and Riot Games.
Finnish mobile games maker Supercell will now have Tencent's backing as it pushes more aggressively into China's online gaming market. For Japanese internet and telecoms group SoftBank, the Tencent deal will mark its third major asset reshuffle in the past month.
Tencent will acquire about 84.3 percent of Supercell via a wholly-owned consortium, including all of SoftBank's 72.2 percent stake, it said on Tuesday. The sale is one of the world's biggest ever gaming deals.
The consortium will open up to co-investors, though Tencent expects to maintain a 50 percent voting interest, it said.
Supercell, also creator of 'Boom Beach' and 'Hay Day', has a handful of successful games and gets revenue from in-game purchases, helping it to avoid the problems faced by the likes of rival Rovio Entertainment, which has failed to create a new hit game since its 2009 launch of Angry Birds.
With just 180 employees, Supercell had pre-tax profit of 880 million euros and sales of 2.1 billion euros ($2.38 billion) last year, putting the six-year-old firm among Finland's biggest companies measured by earnings.
Independent financial analyst Richard Windsor said: "Clash of Clans has been constantly in the top 5 grossing apps ... for a very long time, making this a great platform (for Tencent) from which to begin building a position in developed markets."
Clash of Clans is a war strategy game in which players build fortresses, form clans and battle it out with other clans in a Medieval-style fantasy world.
INDEPENDENCE
Supercell's current management will keep their operational independence and the company will remain in Finland.
CEO Ilkka Paananen said Supercell participated in the search of a new partner and had also considered a flotation.
"This deal enables us to keep Supercell privately held. That is a better match with our small size and unique culture than being a public company where our concern would be the pressure from financial markets to think short term," he said.
SoftBank is seeking to bolster its finances following its 2013 acquisition of a majority stake in struggling U.S. wireless carrier Sprint Corp (N:S). SoftBank said the latest sale would yield a return of around 2.9 times its original investment. It expects to book a 600 billion yen ($5.74 billion) pre-tax profit this financial year from the sale, it said. The Japanese group this month said it would sell $10 billion worth of shares in China's Alibaba Group Holding Ltd (N:BABA) to cut debt.
In a surprise move, SoftBank also said on Tuesday President Nikesh Arora would resign at its Wednesday shareholder meeting, less than two years after he joined the group.