French publisher Ubi Soft Entertainment has confirmed weeks of speculation by announcing that it has reached an agreement to acquire Red Storm Entertainment. The deal is essentially complete and is only subject to stockholder and regulatory approval. Under the agreement, Red Storm will become a wholly owned subsidiary of Ubi Soft, and its products will be marketed under the Ubi Soft brand. However, it is expected that Red Storm will continue to operate as an independent company.
The negotiations leading up to the acquisition announcement were initiated in May at the Electronics Entertainment Expo in Los Angeles. According to Red Storm, merging with Ubi Soft will allow the company to take the next step in profitability, growth, and strong development. In fact, Ubi Soft plans to fully support future game releases in the Tom Clancy's Rainbow Six franchise. Clancy, who was previously a part owner of Red Storm Entertainment, will not own a piece of the new subsidiary company, but he has agreed to a new long-term licensing and endorsement agreement with Red Storm and Ubi Soft.
Red Storm's public relations manager Cassie Vogel commented to GameSpot on the subject of future game releases under the new agreement: "Red Storm will continue to produce high quality action/strategy games. We know Rainbow Six fans are looking forward to more. In fact, the acquisition will likely increase the number of titles that the company will release in the future. Our goal is to make games that our fans want to play, regardless of the genre. For example, Red Storm is coming out with an action/adventure game called Freedom: First Resistance in the fourth quarter this year."
In addition, the deal will not affect Red Storm's current release schedule, according to Vogel. The company's upcoming game, Tom Clancy's Rainbow Six: Covert Operations Essentials, will be the first product shipped by Ubi Soft. On the development front, both PC and console games will continue to be developed in their respective Ubi Soft studios, Red Storm studios, and through third-party developers. Red Storm will also take over publishing Peacemakers, a Ubi Soft strategy game.
"The games published by Red Storm will complement Ubi Soft's product range, and this acquisition will allow the group to reinforce its existing expertise in multiplayer action and strategy games," said Yves Guillemot, president and CEO of Ubi Soft Entertainment. "We are convinced that, in the years to come, this genre of game will undergo strong growth, as witnessed by the dazzling success of Rainbow Six and Rogue Spear. Red Storm is indisputably the leader in multiplayer action and strategy games. This agreement also gives Ubi Soft access to world-renowned licensees such as Tom Clancy, which will be added to our already strong brand portfolio."
"This merger is good for Red Storm, as consolidation is a natural and necessary phenomenon in any fast-growing field," said Doug Littlejohns, president and CEO of Red Storm Entertainment. "While Red Storm has been remarkably successful throughout its short life, the acquisition by Ubi Soft, a major player in this industry, will ensure that together we are capable of leaping to the next level of growth and profitability."
Ubi Soft Entertainment is currently pursuing several other unannounced acquisition opportunities. Through acquisition and internal growth, the company plans to establish itself as one of the top five game publishers in the world by 2005.