Sale of a 28% Stake in CJ Games to Tencent for KRW 530 Billion

CJ Games, a leading developer and publisher of online and mobile games in Korea and overseas, and CJ E&M, a shareholder of CJ Games, have agreed to sell a 28% percent stake in CJ Games to Tencent, China’s largest integrated online game company and a maker of WeChat instant messaging application, for KRW 530 billion.  Tencent’s investment in CJ Games includes the purchase of new and existing shares in CJ Games.  Also, as part of the transaction, CJ E&M will spin off its Netmarble game business division, which will in turn merge into CJ Games. 

This transaction received much attention from the media as it is the largest foreign investment in the entire Korean contents industry (including the broadcasting, motion pictures and games industries) and is more than double the investment made by Tencent in Riot Games, the maker of the most played online game “League of Legend.” 

With the expertise in the Game/IT industry and adequate experience and know-how built from the previous transactions involving game companies, including the acquisition of SHR in Turkey and Joygame in Northern Cypress, as well as publishing and game contents related disputes, Shin & Kim’s M&A Team in close collaboration with the Media Contents Team developed convincing arguments and practical solutions to CJ Games in complex negotiations with Tencent, which led to the successful execution of various agreements in a limited timeframe.

Shin & Kim will continue to assist CJ Games until the closing of the transaction.