There’s a big new cross-platform deal in the gaming industry. Embracer Group (LON: 0GFE), a Swedish video game giant, has entered talks to buy Asmodee, a leading global maker of board games. Embracer will buy Asmodee from PAI Partners, a French private equity firm, for 2.75 billion euros ($3.1bn).

• Embracer Group is a publicly-traded video game conglomerate based in Sweden. It’s the holding group of a collection of gaming studios, mostly acquired ones. The company is continuing its acquisition tradition with Asmodee, which sells a host of physical board games and video games based on its board game titles.

• Embracer will hand over 350 million euros ($398mn) worth of shares to Asmodee’s shareholders and 2.4 billion euros ($2.7bn) for cash and debt refinancing, summing up to 2.75 billion euros ($3.1bn). Post-acquisition, Asmodee will become Embracer’s ninth independent division, running a separate business with a distinct CEO as usual with Embracer’s divisions. Embracer is known for this business model, akin to the Berkshire Hathaway of the gaming industry.

• Asmodee brings a lot to Embracer’s plate, including 1.1 billion euros ($1.3bn) in estimated sales this year. The board game giant has a portfolio of nearly 1,000 games sold in more than 50 countries. Its best-known titles include Catan, Pandemic, and 7 Wonders, as well as licensed board games based on external IPs such as Harry Potter, Lord of the Rings, and Dungeons & Dragons.

• Asmodee, a French company, was acquired by local private equity firm PAI Partners for 1.2 billion euros in 2018. PAI put it up for sale this September and found a buyer in Embracer within a few months. Embracer has a habit of buying gaming studios (it bought 37 last year) and grouping them under various divisions. The company is keen on acquisitions to expand its turf and is spending top dollar. Asmodee is Embracer’s biggest acquisition in recent years.

• This year, Embracer’s other notable acquisitions include Borderlands publisher Gearbox Software ($1.3bn) and mobile game developer Easybrain ($640mn).

Embracer will finance Asmodee’s purchase with shares, cash on hand, and new debt that it’ll raise. The Swedish gaming giant expects its total net debt to be 17 billion Swedish kronor ($1.8bn) once the acquisition closes.

Separately, Embracer completed a share sale that raised 6 billion Swedish kronor ($665mn), likely to help with the purchase.

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