The Texas-based esports company GameSquare Holdings and American esports organization FaZe Clan have announced that they have reached an agreement for GameSquare to buy FaZe.
Their joint agreement states that as a result of the deal, a new massive esports company will appear, and thanks to the merger, the new structure will be able to effectively cut costs.
In the summer of 2022, FaZe Clan launched their IPO with an initial valuation approaching $1 billion. However, the market has not been kind to FaZe. Since September 2 last year, FaZe shares have fallen from $17.43 to less than $0.20 per share. Instead of the expected expansion in various esports disciplines, there were even rumors about the possible bankruptcy of the iconic organization, operating since 2010 and owning one of the greatest teams in Counter-Strike and Call of Duty.
The takeover by GameSquare, on the one hand, can save FaZe, but it gives rise to a new task for which there is no answer yet. The fact is that in 2021 GameSquare bought the esports organization Complexity Gaming, which, like FaZe, has many teams in various disciplines. A common rule among many sports tournament organizers is that teams controlled by a single beneficiary are not allowed to participate in competitions. There are such standards, in particular at ESL, which conducts Counter-Strike competitions. FaZe and Complexity’s CS squads are both Louvre Agreement members and have permanent spots at ESL tournaments until the agreement expires at the end of 2024.
There is currently no information on how GameSquare will solve this puzzle.
For now, all we know is that the deal should be closed in the fourth quarter of 2023, and FaZe’s top managers will receive positions in the new structure.
Old GameSquare shareholders will receive about 55% of the shares in the renewed company, and FaZe shareholders will receive about 45% respectively.
