STOCKHOLM: Embracer Group AB said Wednesday it intends to separate into two publicly traded companies, spinning off its Fellowship Entertainment unit in a move aimed at sharpening management focus and accelerating value creation.
The board of directors proposed distributing shares of Fellowship Entertainment to Embracer shareholders through a so-called Lex ASEA dividend, with a listing on Nasdaq Stockholm planned for calendar year 2027. The separation requires shareholder approval at a general meeting.
Fellowship Entertainment, described as an IP-led entertainment company built around game development, publishing and licensing, will serve as steward of franchises including The Lord of the Rings and Tomb Raider. On an illustrative historical basis for fiscal year 2025/26, the unit reported net sales of 4.393 billion Swedish kronor and employed 2,169 people as of March 31, 2026.
The remaining Embracer business, which will continue as a publicly traded company, reported illustrative net sales of 11.544 billion kronor for the same period and a headcount of 3,518.
“This separation is about sharper management focus and clearer accountability, giving each business the structure and leadership to realize more of its full potential,” Lars Wingefors, chair of Embracer Group’s board, said in a statement. Wingefors, who is also the company’s largest shareholder, said he is “strongly committed to support the preparations to drive value in two listed companies over the long-term.”
Starting with the first quarter of fiscal year 2026/27, Embracer Group will report results through two distinct segments: Fellowship Entertainment and Embracer, a structure designed to enhance transparency ahead of the spin-off.
Fellowship Entertainment will house critically acclaimed studios including Crystal Dynamics, Eidos-Montréal, Dark Horse Media, Warhorse Studios and Middle-earth Enterprises, among others. Its intellectual property roster includes Darksiders, Dead Island, Kingdom Come Deliverance, Metro and Remnant. The company will report through two business areas: Development & Publishing, and Licensing, with the latter focused on dedicated IP management to create recurring revenue across games, film and consumer products.
Embracer will operate as a home for proven entrepreneurs and creative talent, with a focus on tighter cost control and disciplined capital allocation. Its portfolio includes Aspyr, Beamdog, CrazyLabs, Deca, THQ Nordic and Tripwire, among others. Embracer will report through four business areas: PC/Console Games, Mobile Games, Entertainment & Services, and Other.
As part of the transition, Müge Bouillon, group chief financial officer, was appointed deputy CEO of Embracer Group effective Tuesday. Her key responsibility will be to establish an enhanced governance structure for the Embracer business segment.
Current Embracer Group CEO Phil Rogers and COO Lee Guinchard will remain in their roles but will now focus on preparing Fellowship Entertainment for its spin-off. At the time of separation, they will transition to become CEO and COO of Fellowship Entertainment, alongside Bouillon as CFO.
A recruitment process for a new CEO and CFO for Embracer has begun, with appointments expected well ahead of the spin-off.
“Our direction is clear: to build a more disciplined group with two distinct businesses, each with a mandate and a structure that supports transparency and execution,” said Phil Rogers, CEO of Embracer Group. “I am confident that this is the right path forward to deliver long-term value for our fans, our businesses and IPs, our people, and our shareholders.”
The board said it will review the full capital structure — including equity and debt — for both Fellowship Entertainment and Embracer ahead of the separation. The current dual-share class structure of A and B shares will be replicated in the new public company.
