BY Richard Summerfield
Microsoft Corp has announced a $68.7bn all-cash deal to acquire Activision Blizzard in the biggest gaming industry deal in history. The deal will see Microsoft become the world’s third-biggest gaming company by revenue behind China’s Tencent and Japan’s Sony.
The deal, which is also set to become the largest all-cash acquisition on record and Microsoft’s biggest ever deal, will see the company pay $95 per share – a 45 percent premium to Activision’s closing price last Friday.
Under the terms of the deal, Bobby Kotick will continue to serve as chief executive of Activision Blizzard, and he and his team will maintain their focus on driving efforts to further strengthen the company’s culture and accelerate business growth. Once the deal closes, the Activision Blizzard business will report to Phil Spencer, chief executive of Microsoft Gaming.
“Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms,” said Satya Nadella, chairman and chief executive of Microsoft. “We’re investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all.”
“Players everywhere love Activision Blizzard games, and we believe the creative teams have their best work in front of them,” said Mr Spencer. “Together we will build a future where people can play the games they want, virtually anywhere they want.”
“For more than 30 years our incredibly talented teams have created some of the most successful games,” said Mr Kotick. “The combination of Activision Blizzard’s world-class talent and extraordinary franchises with Microsoft’s technology, distribution, access to talent, ambitious vision and shared commitment to gaming and inclusion will help ensure our continued success in an increasingly competitive industry.”
The transaction is subject to customary closing conditions, regulatory review and Activision Blizzard’s shareholder approval. The deal is expected to close in fiscal year 2023 and will be accretive to non-GAAP earnings per share upon close. The transaction has been approved by the boards of directors of both Microsoft and Activision Blizzard.
Throughout the COVID-19 pandemic, gaming has enjoyed a dealmaking boom. Last week, Take Two Interactive acquired Zynga in a $12.7bn deal, creating a global console and mobile gaming giant.
News: Microsoft to gobble up Activision in $69 billion metaverse bet