Saudi wealth fund makes second US$1b bet on Swedish gaming

SAUDI Arabia’s wealth fund has made its second US$1 billion foray into the Swedish gaming industry this year as part of a drive to build stakes in video game makers and e-sports firms globally.

The Public Investment Fund’s Savvy Gaming Group will become the second largest owner in Embracer Group after acquiring almost 100 million shares in the Karlstad-based company. The move follows a similarly sized acquisition in January, when Savvy bought the esports division of Modern Times Group at an enterprise value of US$1.05 billion. 

The PIF, as the $500 billion fund is known, continues to deepen its push into a gaming sector that continues to consolidate. Last month, the fund took a 5.01 per cent stake in Nintendo Co., marking its third investment in a Japanese games company.

The announcement of a rights issue directly to Savvy sent Embracer’s shares up nearly 10 per cent during early trading in Stockholm on Wednesday. As a result of the deal, PIF will take an 8.1 per cent stake in the Swedish company for 10.3 billion kronor (S$1.49 billion). The price of 103.47 kronor per share represents a premium of 15 per cent from the closing price on June 7. 

Embracer last month said it was in talks with potential long-term strategic investors. A rapid pace of acquisitions has helped the company become one of Europe’s largest gaming firms, and it is currently weighing a move to Nasdaq Stockholm’s main market to help broaden the investor base. 

The relationship with Savvy will let Embracer set up a regional hub in Saudi Arabia from which it will be able to make investments in the region, Embracer’s chief executive officer Lars Wingefors said in a statement. The proceeds from the share issue will be used to continue its acquisition strategy. BLOOMBERG