Shares of Ubisoft Entertainment SA listed in the US surged by up to 20% after the announcement that the company plans to establish a new subsidiary valued at around €4 billion ($4.3 billion). This new entity will include popular games like Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six. Tencent Holdings Ltd. will be investing €1.16 billion to hold a 25% stake in the subsidiary, securing licenses for the intellectual property of these games in exchange for royalties. This move by Tencent demonstrates confidence in Ubisoft, especially following a challenging period post-pandemic lockdowns. The valuation of the subsidiary indicates Tencent's belief that Ubisoft's shares are undervalued. The decision to create this subsidiary began in January after disappointing outcomes with Star Wars Outlaws and delays in the newest Assassin’s Creed release. Ubisoft CFO Frederick Duguet confirmed receiving various offers that ultimately led to the competitive valuation of the new unit. Analysts see this deal as a positive step to potentially resolve Ubisoft's financial issues. CEO Yves Guillemot expressed optimism in this restructuring, stating that it will enhance the company's operational flexibility and ambition. Proceeds from the subsidiary's formation will be utilized to pay off debts and develop other gaming franchises. The new subsidiary will oversee existing and upcoming games in Ubisoft's portfolio, with the deal expected to be finalized by the end of 2025. The recent launch of Assassin’s Creed Shadows received favorable reviews, signaling a positive direction for Ubisoft. Although specific sales figures were not disclosed, the game's success in terms of acclaim and player engagement is evident.