Saudi Wealth Fund makes second $1 bn bet on Swedish gaming

Saudi Arabia’s wealth fund has made its second $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 AB after acquiring almost 100 million shares in the Karlstad-based company. The move follows a similarly sized acquisition in January, when Savvy bought the e-sports division of Modern Times Group at an enterprise value of $1.05 billion. 

The PIF, as the $500 billion fund is known, continues to deepen its push into a gaming sector that is in the grip of consolidation. Last month, the fund took a 5.01% 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% during early trading in Stockholm on Wednesday. As a result of the deal, PIF will take an 8.1% stake in the Swedish company for 10.3 billion kronor ($1.05 billion). The price of 103.47 kronor per share represents a premium of 15% 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.