Swedish gaming company Embracer Group AB (publ) (OM:EMBRAC B) will sell one of its largest subsidiaries, Saber Interactive (Saber Interactive Inc.), to a group of private investors in a deal worth up to $500 million, according to a person familiar with the transaction. Saber will become a privately owned company with around 3,500 employees, said the person, who asked not to be identified discussing nonpublic information. The deal will be one of Embracer's largest moves yet in an ongoing cost-cutting initiative that has seen the company lay off employees and shutter studios around the world over the past year.

Saber and Embracer declined to comment. Over the past year, as interest rates soared and a $2 billion partnership with a gaming group backed by Saudi Arabia's sovereign wealth fund fell through, Embracer has been shedding costs. The debt-saddled company has shut down several subsidiaries, canceled projects and is looking to sell more divisions.

The $500 million figure includes an option for Saber to bring along multiple Embracer subsidiaries, the person said.