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Embracer Groups Is Breaking Into 3 Independent Publicly Listed Entities

Embracer Groups Is Breaking Into 3 Independent Publicly Listed Entities

Embracer Group announced a “transformative step” today that will see the group split into three companies namely Asmodee Group, Coffee Stain & Friends, and Middle-earth Enterprises & Friends. Each of the companies will focus on a separate core strategy and “offer more differentiated and distinctive equity stories for existing and new shareholders”.

Embracer Groups Is Breaking Into 3 Independent Publicly Listed Entities

“The Board of Directors, together with executive management, propose to transform Embracer Group into three separate, listed companies,” said Kicki Wallje-Lund, the Chair of the Board of Embracer Group. “This transformation is an important step in unlocking shareholder value.”

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“With this new structure, the three entities will be able to focus on executing their core strategies and leveraging their own strengths, providing more differentiated and distinct equity stories to both existing and new shareholders. After careful evaluation of various strategic alternatives, we strongly believe that this decision will benefit all stakeholders and position us for continued success in the future.”

The announcement is coming on the heels of the end of Embracer Group’s restructuring which saw the shuttering of several studios, mass layoffs, and the divestment of Gearbox Entertainment to Take-Two Interactive. According to Embracer Group’s Board of Directors, the splitting of the company will help the independent companies to “unlock value in the high-quality assets.

“This move has been made with the intention to unleash the full potential of each team and provide them with their own leadership and strategic direction,” said Embracer Group CEO and co-founder Lars Wingefors. “This is the start of a new chapter, a chapter that I intend to remain part of as an active, committed, and supportive shareholder of all three new entities, with an evergreen horizon.”

“This move towards three independent companies reinforces Embracer’s vision of backing entrepreneurs and creators with a long-term mindset, allowing them to continue to deliver unforgettable experiences for gamers and fans across the globe.”

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The shares of Asmodee Group and Coffee Stain & Friends will be distributed as a dividend to shareholders of Embracer Group while Middle-earth Enterprises & Friends will remain listed as Embracer Group on Nasdaq Stockholm pending when it will be renamed—effectively putting an end to the Embracer brand.

The components of the three new companies emerging from the Embracer Group

Embracer Groups Is Breaking Into 3 Independent Publicly Listed Entities

According to the statement released by the company, the decision to break up the company became necessary after “a careful and thorough review”. The board believes the breaking of Embracer Group is “for the benefit of all employees, gamers, and shareholders”. The companies will focus on three different game segments.

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Asmodee will focus on “board games, trading cards, and digital board games with 23 fully owned studios and 300+ IPs”. Going forward, it will “constitute the Tabletop Games operating segment of Embracer Group”.

Coffee Stain & Friends will become Embracer Group’s arm for PC, console, and mobile games. The arm will operate two segments namely premium PC and console games and free-to-play games. The studios that will be under Coffee Stain & friends include Coffee Stain, Ghost Ship, Tarsier, Tuxedo Labs, and THQ Nordic.

Embracer Groups Is Breaking Into 3 Independent Publicly Listed Entities

Middle-earth Enterprises & Friends will be the new creative powerhouse in AAA game development and publishing for PC and console. It will be the home of the IPs Tomb Raider, Metro, Dead Island, and The Lord of the Rings. The studios that will be under Middle-earth Enterprises & Friends include Crystal Dynamics, Dambuster Studios, Eidos-Montreal, Flying Wild Hog Studios, Tripwire, Vertigo Games, Warhorse Studios, and 4A Games.

Current shareholders of the company will have the chance to freely decide on how their capital will be distributed between the three companies. Will this rebranding help Embracer Group to save its battered public image? Only time will tell.