- Microsoft Corp. (Nasdaq: MSFT) announced plans to buy Activision Blizzard Inc. (Nasdaq: ATVI) for $68.7 billion. These are the details.
Microsoft (Nasdaq: MSFT) announced it is planning to buy Activision Blizzard Inc. (Nasdaq: ATVI), a leader in game development and interactive entertainment content publisher. This deal will accelerate the growth in Microsoft’s gaming business across mobile, PC, console and cloud and will provide building blocks for the metaverse.
Microsoft is buying Activision Blizzard for $95.00 per share, in an all-cash transaction valued at $68.7 billion, inclusive of Activision Blizzard’s net cash. And when the deal closes, Microsoft will become the world’s third-largest gaming company by revenue, behind Tencent and Sony. The planned deal includes iconic franchises from Activision, Blizzard, and King studios like “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty” and “Candy Crush,” in addition to global eSports activities through Major League Gaming. The company has studios around the world with nearly 10,000 employees.
Bobby Kotick is going to continue to serve as CEO of Activision Blizzard. And Kotick 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 team will report to Phil Spencer, CEO, Microsoft Gaming.
Mobile is known as the largest segment in gaming, with nearly 95% of all players globally enjoying games on mobile. And through great teams and great technology, Microsoft and Activision Blizzard will empower players to enjoy the most-immersive franchises such as “Halo” and “Warcraft,” virtually anywhere they want. And with games such as “Candy Crush,” Activision Blizzard´s mobile business represents a significant presence and opportunity for Microsoft in this fast-growing segment.
The deal also bolsters Microsoft’s Game Pass portfolio with plans to launch Activision Blizzard games into Game Pass, which has reached a new milestone of over 25 million subscribers. And with Activision Blizzard’s nearly 400 million monthly active players in 190 countries and three billion-dollar franchises, this deal will make Game Pass one of the most compelling and diverse lineups of gaming content in the industry. Upon the closing, Microsoft will have 30 internal game development studios, along with additional publishing and esports production capabilities.
The deal is subject to customary closing conditions and completion of regulatory review and Activision Blizzard’s shareholder approval. And the deal is expected to close in fiscal year 2023 and will be accretive to non-GAAP earnings per share upon close. The deal has been approved by the boards of directors of both Microsoft and Activision Blizzard.
Goldman Sachs & Co. LLC is serving as financial advisor to Microsoft and Simpson Thacher & Bartlett LLP is serving as legal counsel. And Allen & Company LLC is acting as financial advisor to Activision Blizzard and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel.
KEY QUOTES:
“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.”
— Satya Nadella, chairman and CEO, Microsoft
“Players everywhere love Activision Blizzard games, and we believe the creative teams have their best work in front of them. Together we will build a future where people can play the games they want, virtually anywhere they want.”
— Phil Spencer, CEO, Microsoft Gaming
“For more than 30 years our incredibly talented teams have created some of the most successful games. 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.”
— Bobby Kotick, CEO, Activision Blizzard
