The Wall Street Journal takes a look at Martin Lau, President of Tencent Holdings and Tencent’s recent purchase of Supercell. It is interesting to read that Tencent had attempted to purchase Supercell years earlier but couldn’t agree on a price.
Chinese web giant’s acquisition of Finnish games maker is latest in string of bold bets for Martin Lau.
HONG KONG—In his charm offensive to win China’s biggest overseas technology acquisition, Martin Lau swapped his sophisticated banker persona for that of geeky gamer by playing up his obsession with Supercell Oy’s mobile game “Clash Royale.”
Mr. Lau, president of Chinese internet giant Tencent Holdings Ltd. “had just dropped out from the ‘Clash Royale’ global top-100 players, and it was almost impossible to get his focus back to the topics we had to discuss,” Supercell co-founder Ilkka Paananen wrote on his blog after the deal was announced last month.
Tencent’s $8.6 billion deal to buy the Finnish games maker from Japan’s SoftBank Group Corp. and other shareholders shines a spotlight on Mr. Lau, a low-key but polished former Goldman Sachs banker. The 43-year-old executive is central to the Chinese company’s ambitions to grow outside China—where it leads in videogames and runs the biggest messaging platforms—into a global company.
Mr. Lau’s obsession with “Clash Royale”—colleagues say he plays it and other Supercell games in the office—and his assurance that Supercell’s management would stay in charge after the takeover helped win the deal.
For Mr. Lau, the Supercell buy is the latest in a string of bold bets, starting with his decision more than a decade ago to leave Goldman Sachs to join Tencent, which was then an upstart internet company valued at $1.3 billion. He has since led Tencent’s growth through deals to buy into China’s biggest startups and major U.S. videogame companies.
Investors recently valued Tencent at about $224 billion, more than Intel Corp., at $165 billion, or International Business Machines Corp., at $153 billion. It is the world’s biggest games publisher by revenue with a dominant share in China. It has a huge distribution network for mobile games in its ubiquitous WeChat messaging service, which boasts 762 million monthly active users.
Still, some investors argue that Mr. Lau is making a risky bet on Supercell churning out more hit games. Tencent’s deal valued the Finnish company at a pricey $10.2 billion, almost double what it was a year earlier. Other top mobile game companies such as Rovio Entertainment Ltd., the company behind the “Angry Birds” franchise, have struggled to repeat early success with new offerings. Supercell also faces up-and-coming rivals such as Silicon Valley startup Machine Zone Inc., known for “Game of War: Fire Age.” Japan’s Nintendo Co. is also expanding into mobile games with its part-ownership in the “Pokémon Go” sensation.
“This deal is a test of Tencent’s ability to make overseas acquisitions work,” said Tony Chu, portfolio manager at RS Investments, which manages $17 billion. “As long as Supercell is doing well, Tencent can leave it alone. The question is: what will it do if Supercell’s growth slows?”
The rest of the article can be read HERE.