Embracer Group has announced the sale of Gearbox Entertainment (the creators of Borderlands) for $460 million. The buyer is Take-Two Interactive, the publisher behind the GTA and Red Dead Redemption series.
Today's announcement marks the result of the final structured divestment process and is an important step in transforming Embracer into the future with notably lower net debt and improved free cash flow. Through the transaction, we lower business risk and improve profitability as we transition to becoming a leaner and more focused company. After evaluating several options for Gearbox, I am happy that we have reached a solution that is in the best interest of all stakeholders. Randy and the team have been great team members throughout the past years, and I would like to thank them all for that. As one of the world's greatest games developers, I am confident that Gearbox will continue to innovate and thrive in their new home within Take-Two.
Notably, Embracer Group acquired Gearbox in 2021 for $1.3 billion. Thus, this deal was clearly not profitable for the company.
The press release explains that Take-Two will pay for the Gearbox acquisition with recently issued shares, which should bring Embracer Group potential future profits.
Incidentally, the rights to game series such as Borderlands, Tiny Tina's Wonderlands, Homeworld, Risk of Rain, Brothers in Arms, and Duke Nukem now belong to Take-Two.
Furthermore, it has been revealed that despite the sale of Gearbox Entertainment, Embracer Group has managed to retain the Gearbox Publishing San Francisco division, which will be renamed as part of the deal.