What's going on?

Tencent, a massive Chinese tech company, is buying most of Supercell, the Finnish firm behind the hugely popular Clash of Clans game. The seller? Japanese telecoms and internet giant Softbank. The value? About $9 billion.

What does this mean?

Tencent owns WeChat, which is kind of like China�s version of Facebook. WeChat users do a lot more �gaming� than Facebook�s users though. Presumably this is one of the reasons why Tencent is buying the gaming company Supercell. This deal will also allow Tencent to broaden its reach outside of China.

Supercell had been largely allowed by Softbank to operate on its own. The hope for Supercell is that it can keep its operational independence while also tapping into Tencent�s lucrative distribution channels (e.g. WeChat).

Why should I care?

For the markets: Softbank�s motivations are a little murky. The internet giant�s game plan isn�t absolutely clear. It has been selling off investments (including part of its stake in Alibaba) supposedly in order to pay down its heavy debt load. Some, however, think that Softbank will, in the longer term, use the proceeds of its sales to once again make big acquisitions. Perhaps relatedly, it was announced that the heir apparent to Softbank�s CEO was resigning after its CEO unexpectedly said he plans to remain in charge for many more years.

The bigger picture: Chinese companies are on a HUGE shopping spree. They have now spent more on overseas acquisitions this year than they did during all of last year (which already was a record year). The deals appear to be strategic in nature (both for the companies involved and the Chinese government): for example, there have been�acquisitions of a company that focuses on the �future of food� and one that develops robots. As one banker says (according to Reuters), �[their] appetite is particularly voracious for technology, media, healthcare and financial services.�