Embracer Group to Split into Three Separate Companies, Shares Soar

Embracer Group to split into 3 publicly listed entities: Asmodee, Coffee Stain, and Middle-earth Enterprises, empowering each team to grow and excel further.

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Salman Khan
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Embracer Group to Split into Three Separate Companies, Shares Soar

Embracer Group to Split into Three Separate Companies, Shares Soar

Embracer Group, a Swedish video game and media holding company, has announced plans to split into three separate publicly listed entities: Asmodee Group, Coffee Stain & Friends, and Middle-earth Enterprises & Friends. The move caused Embracer's shares to rise as much as 18% on the news, reflecting investor optimism about the company's future prospects following the restructuring.

Under the new plans, Asmodee Group will become a standalone publicly listed company handling tabletop publishing and distribution, while Coffee Stain & Friends will focus on indie and double-A premium and free-to-play titles. Middle-Earth Enterprises & Friends will operate as a triple-A developer and publisher, overseeing major franchises like The Lord of the Rings, Tomb Raider, Dead Island, Metro, and Kingdom Come: Deliverance.

Embracer CEO Lars Wingefors stated that the split will "empower each individual and each team to grow and excel further in their careers as well as provide them with their own leadership and strategic direction." He intends to remain a long-term, active, and supportive owner of all three entities.

The restructuring follows a challenging period for Embracer, which recently sold off developers Gearbox Entertainment and Saber Interactive, laid off over 1,400 employees, and shut down multiple studios. The company has also entered into a €900 million financing agreement through Asmodee to repay existing debt and reduce leverage.

Why this matters: The split of Embracer Group into three separate companies is a significant event in the gaming industry, with potential implications for the future of major video game franchises and the tabletop gaming market. The move could allow each entity to better focus on its core strengths and strategies, potentially leading to improved performance and value for shareholders.

Corporate Restructuring: Shares of Asmodee Group and Coffee Stain & Friends will be distributed as a dividend to Embracer shareholders and listed on Nasdaq Stockholm, while Middle-earth Enterprises & Friends will remain within the current listed company Embracer Group, which will be renamed. The exact allocation of companies and assets between the three entities is still subject to minor potential adjustments. The spinoff of Asmodee is expected to be completed within 12 months, while the split from Coffee Stain may take place later in 2025.

Key Takeaways

  • Embracer Group to split into 3 publicly listed entities: Asmodee, Coffee Stain, and Middle-earth.
  • Asmodee to focus on tabletop publishing, Coffee Stain on indie/AA games, Middle-earth on triple-A.
  • Restructuring aims to empower teams and provide strategic direction, following recent challenges for Embracer.
  • Asmodee and Coffee Stain shares to be distributed as dividends, Middle-earth to remain within Embracer.
  • Embracer CEO to remain a long-term, active, and supportive owner of the 3 entities.