Everything you need to know about the record $69 billion deal – Technology News, Firstpost
FP StaffJanuary 19, 2022 10:41:53 IST
Microsoft is making history after it announced Tuesday that it will acquire Call of Duty maker Activision Blizzard for $68.7 billion in the game’s largest deal.
The deal will be Microsoft’s largest ever and is expected to be its largest cash acquisition ever.
Here’s what you need to know about the record making deal:
The $68.7 billion all-cash deal will turn Microsoft, the maker of the Xbox gaming system, into one of the world’s largest video game companies.
The deal will make the Xbox maker the world’s third largest gaming company by revenue, behind China’s Tencent and Japan’s Sony, maker of PlayStation game consoles.
Announcing the acquisition, Microsoft Chief Executive Satya Nadella 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.”
For those who don’t know, Activision is known for popular games like Call of Duty and Tony Hawk’s Pro Skater. Started in 1979 by former Atari Inc employees, Activision has created or purchased many of the most popular video games, from Pitfall in the 1980s to Guitar Hero and the World of Warcraft franchise.
An Associated Press report said that if the deal passes scrutiny from US and European regulators in the coming months, it could be one of the largest tech acquisitions in history. Dell bought data storage company EMC in 2016 for about $60 billion.
The deal comes at a time when Activision is plagued by complaints of sexual harassment, misconduct and discrimination in the workplace. Last year, it was investigated by the Securities and Exchange Commission over workplace discrimination complaints, and in September it settled claims filed by U.S. regulators for worker discrimination.
The California Civil Rights Bureau sued the Santa Monica company in July, citing a “frat boy” culture that had become a “breeding ground for harassment and discrimination against women.”
According to a press release detailing the announced acquisition, Bobby Kotick, the controversial CEO of Activision Blizzard, will continue to serve in his role.
A bigger deal than LinkedIn
Microsoft’s previous top acquisition was LinkedIn in 2016, which cost more than $26 billion.
CNBC.com reports that Microsoft was valued at about $400 billion at the time of the LinkedIn announcement, so the purchase was about 6.5 percent of its market cap.
Today, Microsoft is valued at nearly $2.3 trillion and pays Activision just three percent of its market cap.
With input from agencies