Microsoft Buying Activision Blizzard For Nearly $69 Billion—Will Be 3rd Largest Gaming Company
LONDON ( Web News )
Microsoft said on Tuesday it plans to acquire Activision Blizzard, the gaming company behind the wildly successful Call of Duty and World of Warcraft—and damaging reports of workplace discrimination—in a $68.7 billion deal that will make Microsoft the third-largest gaming company by revenue once the acquisition is complete.
Microsoft will buy the company in an all-cash transaction for $95 per share, valued at $68.7 billion, Microsoft said in a press release.
Activision Blizzard has been facing numerous reports of sexual harassment and is under investigation from the Securities and Exchange Commission for allegations of workplace discrimination.
Bobby Kotick, who faced calls to resign over the workplace allegations, will remain as CEO of Activision, according to Microsoft, and the gaming company will report to Phil Spencer, CEO of Microsoft Gaming once the deal closes in 2023.
Satya Nadella, chairman and CEO of Microsoft, said in a press release the company is investing in world-class content to create a new era of gaming “that makes gaming safe, inclusive and accessible to all.”
Following the announcement, Activision’s shares are up 30%, while Microsoft’s shares fell 2%.
400 million. That’s about how many monthly active gaming users Activision will bring to Microsoft.
Microsoft, the maker of Xbox, has been actively investing in the metaverse. Activision, the largest video game company in the country, faced a reckoning last year over allegations of widespread sexual misconduct and other discriminatory practices at the company. The California Department of Fair Employment and Housing sued Activision Blizzard in July after a two-year investigation into the company, alleging executives engaged in a “frat boy” culture, and that the company allegedly denied promotions to female employees. Company shares fell 27% after the lawsuit was announced, and again plunged in November following reports Kotick knew of sexual misconduct at the company for years. Several top executives resigned over the scandal, and Kotick also faced calls to resign.
Spencer previously said he was “evaluating all aspects of our relationship with Activision Blizzard and making ongoing proactive adjustments” in November, in light of the allegations that Kotick knew of sexual harassment at the company, according to an email to staff obtained by Bloomberg. Spencer reportedly said he and the gaming leadership team were “disturbed and deeply troubled by the horrific events and actions,” according to the email.
The deal is Microsoft’s largest acquisition in its 46-year history, and the largest M&A deal in tech history. The acquisition could face antitrust investigations, as lawmakers have pushed to limit the power of big tech.