Giant Interactive Group, one of China’s largest video game companies, will return to China’s main board by reverse merger, according to an announcement on Sunday.
The game company will take the shell of Century Cruises, a main board-listed tourism company. According to the announcement, Century Cruises will acquire all shares of Giant Interactive Group for RMB 13.1 billion (USD 2 billion). After the deal, Shi Yuzhu, the founder and chairman of Giant Interactive Group, will be the actual controller of Century Cruises.
Ji Xuefeng, the president of Giant Interactive Group, told China Business News that after the company goes public, it will accelerate its overseas acquisition. It’s reported that the game company is in negotiations to acquire one of the top-five mobile game companies in the world.
Notable among the new shareholders are Yunfeng Capital led by Jack Ma, Hony Venture Capital headed by Lenovo’s chair Liu Chuanzhi, and leading Chinese private equity manager CDH Fund. Yunfeng Capital will hold 9% of the company’s shares while Hony Venture Capital will take 6.92%.
Jack Ma, Liu Chuanzhi and Shi Yuzhi are intimate friends as well as long-term business partners. Giant Interactive was an Alibaba shareholder before it went public and gained a four-fold profit out of the deal.
Giant Interactive Group withdrew from the U.S. stock market last July at the price of USD 2.87 billion, the first Chinese game company to leave the U.S. stock market. It finished the removal of its VIE structure in September.
Giant Interactive Group was established in November 2004 as ZT Network with ZT Online being its flagship game. The company was renamed Giant Interactive in 2007 after Lanlin Capital, a venture capital controlled by Shi Yuzhu, acquired the company.
Photo from ZT’s official site
Giant Interactive’s net profit in the first nine months of this year was RMB 218 million (USD 34.6 million). It achieved net profits of RMB 1.27 billion (USD 15 million) in 2012, RMB 1.31 billion (USD 20 million) in 2013 and RMB 2.18 billion (USD 35 million) in 2014.
It’s estimated that China’s game market will reach USD 22.2 billion by the end of 2015, according to a report by Dutch video game research company Newzoo.
Photo from Newzoo