Breaking News: Microsoft Is Acquiring Activision Blizzard

Breaking News: Microsoft Is Acquiring Activision Blizzard

What’s happening?

Less than an hour ago, Microsoft (MSFT) announced further expansion into the video game industry with its planned acquisition of Activision Blizzard (ATVI).

How much?

The all-cash deal values Activision at $95 per share, or $68.7 billion — a 45% premium on its closing price of $65.39 per share yesterday.

What does this mean?

  • This will be Microsoft’s largest acquisition to date — following its $26 billion acquisition of LinkedIn in 2016 — and also represents the largest video game industry deal of all time.

  • It also beefs up Microsoft’s gaming offering significantly, adding to its current roster of Xbox, Minecraft, and Bethesda, and making it the third-largest gaming company in the world after Tencent and Sony.

  • It looks like the deal has been made in a bid to get a foot in the lucrative mobile gaming industry — which took in record revenues of $93 billion in 2021. This follows a trend of recent gaming acquisitions, including Take-Two Interactive’s (TTWO) recent purchase of Zynga, which our analyst Mike covers here.

  • Microsoft has also confirmed its intentions to explore the metaverse through its new subsidiary.

The deal is expected to close in the fiscal year 2023 pending regulatory reviews and Activision shareholder approval. Bobby Kotick, Activision’s controversial CEO, will reportedly step down following the acquisition.

What’s being said?

From Microsoft’s announcement:

“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. 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.” — CEO, Satya Nadella

Watch out for MyWallSt’s complete analysis on this unfolding story later this week.