Microsoft said Tuesday it would purchase video game publisher Activision Blizzard in a cash transaction worth $68.7 billion (approximately Rs. 512,362 crores), or $95 per share, including Activision Blizzard’s net cash. The Redmond-based software giant said that when the transaction closes, it will become the world’s third-largest gaming company after Tencent and Sony.
The transaction is subject to customary closing conditions and completion of regulatory review and approval by Activision Blizzard shareholders, Microsoft said. The deal is expected to close in fiscal year 2023. Until this transaction closes, Activision Blizzard and Microsoft Gaming will continue to operate independently.
Microsoft’s offer of $95 per share is a 45 percent premium over Activision’s Friday close. Shares of Activision rose nearly 38 percent to $65.39 before shutting down for news. The acquisition will bolster Microsoft’s Game Pass, which has reached another milestone of more than 25 million subscribers. The company has plans to include Activision Blizzard games in the game pass.
Demand for video games has skyrocketed during the pandemic as home-sitting consumers play more games to entertain themselves. Activision’s library of games like Call of Duty and Overwatch also gives Microsoft’s Xbox gaming platform an edge over Sony’s PlayStation, which has enjoyed a more steady stream of exclusive games for years.
Last week, rival video game publisher Take-Two Interactive Software said it would buy FarmVille maker Zynga in an $11 billion cash-and-stock deal, marking one of the largest industry-wide acquisitions of all time.
In a blog post, Microsoft revealed that Bobby Kotick will continue to serve as CEO of Activision Blizzard, and that he and his team will “continue to focus on driving efforts to further strengthen corporate culture and accelerate business growth.” Once the deal closes, Activision Blizzard’s operations will report to Phil Spencer, CEO of Microsoft Gaming.
In a press statement, Satya Nadella, chairman and CEO of Microsoft, said: “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 are investing heavily in content, community and the world-class cloud to usher in a new era of gaming where players and creators come first and make gaming safe, inclusive and accessible to all.”
“Players everywhere love Activision Blizzard games and we believe the creative teams have their best work ahead of them,” said Phil Spencer, CEO of Microsoft Gaming. “Together, we will build a future where people can play the games they want, pretty much anywhere they want.”
“For over 30 years, our incredibly talented teams have created some of the most successful games,” said Bobby Kotick, CEO of Activision Blizzard. “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.”
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