Owner Embracer of ‘The Lord Of The Rings’ wants to split his company into three

New line/courtesy of Everett Collection

The company that owns the rights to the Lord of the Rings franchise divides its activities.

Embracer Group has unveiled plans to split into three businesses: games publisher Asmodee Group, indie gaming label Coffee Stain & Friends and Middle-earth Enterprises & Friends, where the Lord of the Rings And Tomb Raider rights.

Each company will be listed on the Nasdaq Stockholm stock exchange, but Middle-earth Enterprises & Friends will remain within the currently listed Embracer Group, which will be renamed. Embracer has also entered into a €900 million financing agreement with Asmodee, which will partially repay debt.

Embracer’s largest shareholder, CEO Lars Wingefors, plans a “new long-term ownership structure” and will remain “a long-term, active, committed and supportive owner of all three entities.” Shareholders representing more than 50% of the capital and votes support the plan.

Embracer has been working on a restructuring program since June last year, focusing on cost savings, capital allocation, efficiency and consolidation, while also acquiring companies such as Borderlands franchise owner Gearbox Entertainment to Take-Two Interactive. The company owns or controls 9,003 franchises in areas such as comics and gaming.

Middle-earth Enterprises & Friends will focus on developing and publishing games for PC and console, as well as managing the Lord of the Rings And Tomb Raider franchises. Embracer claimed that the new structure will allow the company “to have a better structure to maximize the potential of its highly strategic franchises.”

It will house several gaming tiers such as Crystal Dynamics, Dambuster Studios, Eidos-Montréal, Flying Wild Hog Studios, Tripwire, Vertigo Games, Warhorse Studios and 4A Games, and own the IP of, among others Dead Island, Kill floor And Subway.

At Middle-Earth Enterprises & Friend, Phil Rogers will take the leading role in the process leading to the demerger. He is currently interim Group Chief Strategy Officer, responsible for the completed restructuring program, and CEO of the Crystal Dynamics – Eidos operating group. CEOs of operating groups at various labels will report to him today.

Further steps will see Rogers, Stéphane Carville and Anton Westbergh appointed to Embracer Group’s executive management. Wingefors remains CEO of the Group, Johan Ekström is CFO and Deputy CEO of the Group, Careen Yapp is Chief Strategic Partnership Officer and Ian Gulam is Chief of Staff, Legal & Governance.

Sweden-based Embracer has acquired Middle-earth Enterprises, which owns the underlying IP address The Lord of the Rings And The Hobbit in August 2022 and paid almost $400 million for it. Amazon has acquired the TV rights The Lord of the Rings in 2017, committing $1 billion for a five-season series. Lord of the Rings: The rings of fire launched on the streamer in September 2022. Season 2 will launch this year.