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Embracer Group's recently failed $2bn deal was reportedly with Saudi PIF-backed Savvy Gaming

Where Embracer was previously on an acquisition spree, the alleged failed deal with Savvy Gaming sent its share value plummeting and led to layoffs.

TJ Denzer

August 14, 2023 1:12 PM

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Embracer Group sent eyebrows raising earlier this year when it disclosed in an earnings results report that it had a $2 billion USD deal unexpectedly fall through. It turns out the company Embracer had in mind to deal with was none other than the Saudi Arabian Public Investment Fund (PIF)-backed Savvy Gaming Group. Savvy Gaming and Embracer Group had previously been on separate acquisition sprees, Embracer buying up studios and Savvy taking large stakes in large-scale publishers and developers.

The identity of Savvy Gaming Group as the company Embracer’s $2 billion deal fell through with was recently reported by Axios. According to parties familiar with the deal and its failure, Savvy Gaming Group pulled out of the deal last second, though the reason why has not been disclosed. What is known is that Savvy Gaming was set to invest $2 billion into Embracer Group for the developing and publishing of Gaming from the latter, with the goal of establishing Savvy Gaming as a major gaming label on the world market.

It was back in May 2023 that Embracer Group disclosed that a $2 billion deal unexpectedly failed. According to reports at the time, all documentation was finalized and ready for the deal to close as of May 23. Embracer asked for execution of the agreement before it would announce in its Q4. Then, the company suddenly received a “negative outcome from the counterparty.” Though we now know Savvy Gaming was allegedly the counterparty, we don’t know why they pulled out. Savvy has not commented on the story or shared clarification at this time.

The failure of the alleged $2 billion deal between Savvy Gaming and Embracer set the latter into cost-cutting mode, which led to layoffs and restructuring at Embracer Group in June. It remains to be seen what comes next for Embracer Group, but it seems the company is still feeling the effects of the failed deal and will be for the next few fiscal quarters.

TJ Denzer

Senior News Editor

TJ Denzer is a player and writer with a passion for games that has dominated a lifetime. He found his way to the Shacknews roster in late 2019 and has worked his way to Senior News Editor since. Between news coverage, he also aides notably in livestream projects like the indie game-focused Indie-licious, the Shacknews Stimulus Games, and the Shacknews Dump. You can reach him at tj.denzer@shacknews.com and also find him on Twitter @JohnnyChugs.