"Tencent intends to bring its expertise and resources to accelerate the growth of Sumo both in the U.K. and abroad," James Mitchell, chief strategy officer at Tencent, told CNBC. "We believe this transaction benefits all stakeholders, and delivers compelling value for Sumo shareholders, while enhancing Sumo's capabilities for the future."
Tencent is the world's largest gaming company. It outright owns Riot Games, the company behind "League of Legends," and holds a 40% stake in Epic Games, the studio behind the ultra-popular "Fortnite." The company also has a 5% stake in Activision Blizzard
Sumo Group was founded in 2003 and has since carved a space for itself in the gaming industry mainly by creating games for other publishers. One of its latest high-profile releases, "Sackboy: A Big Adventure," was published by Sony
However, Tencent has come under fire for its outsized influence in the gaming industry. The week before the Sumo buyout, the Guardian published a lengthy report in which insiders at Riot Games alleged that Tencent told the developer to "consider the Chinese market's assumed preferences when designing characters."
The buyout also comes after Electronic Arts $1.2 billion acquisition in December of Codemasters, one of Britain's oldest names in gaming. Lately, regulators in the U.K. have stressed concerns about the pace of foreign acquisitions, particularly in the technology sector.
"Chinese deals may imply a higher regulatory risk, but we see no likely resistance or counterbid," wrote analysts at Jefferies in a note on Monday. "We always understood Tencent's interest in Sumo as being that Sumo has 'AAA potential' and might have seen the group's future pipeline as attractive."
Tencent's buyout spree did not stop with Sumo. On Tuesday, the Swedish game developer Stunlock Studios disclosed that Tencent had bought a majority stake in their company.
"With this new, deepened partnership, Stunlock Studios will continue to develop games independently, while being backed by Tencent's strategic support," wrote the developer in a statement.