Embracer Loses $2 Billion Deal; Company's Stock Price Plummets
Embracer Group has lost at the final stretch a strategic partner with whom it had been supposed to be „in agreement” for many months. The Swedish giant thus missed out on a two-billion-dollar deal.
As reported by Axios, an attempt by the Embracer Group, a Swedish giant operating in the video game industry, among others, ended in a fiasco. The negotiations were to end abruptly and unexpectedly, after months of intense talks.
Surprising fiasco
Embracer revealed that a verbal commitment to enter a "long-term cooperation of a strategic nature" by the entity in question was to have been made in October 2022.
- The negotiation process was said to be almost in the final stretch.
- The partnership agreement, under which Embracer Group would enter a close cooperation with the unannounced company, amounted to $2 billion - which suggests that an established company was the subject of negotiations.
- The subject of the would-be partnership with the mysterious entity was to be abruptly shutdown on Tuesday evening - to the giant's surprise.
- The Swedes revealed that while the collapse of the deal was unexpected, the negotiation process itself had already taken much longer than expected.
A painful blow for the giant
In the wake of the failed deal, Embracer Group's stock market price fell this morning by more than 40%.
What's more, the company lowered its profit forecast for next year (allegedly due to game delays), from a range of $965 million-$1.3 billion all the way down to $655-840 million.
It is worth recalling that Embracer Group has been acquiring numerous development studios and rights to gaming IPs quite intensively in recent years. A year ago it bought out Crystal Dynamics, Eidos Montreal and Square Enix Montreal, among others.
In addition, the company includes such entities as Deep Silver, 3D Realms, Gearbox Software, 4A Games, Saber Interactive and Flying Wild Hog.
