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Microsoft was amongst ‘a handful’ of companies trying to acquire Activision Blizzard

In January, Microsoft shocked the gaming industry with the announcement of its agreement to acquire Activision Blizzard. Despite on-going troubles at the publisher, the idea of Kotick selling the company still seemed inconceivable. As time goes on though, we are learning more about the timeline of this deal and what it took to get there. In this case, Microsoft was quick to pounce, approaching Activision Blizzard to begin negotiations days after the publication of a damning report centred around CEO, Bobby Kotick. 

Towards the end of last year, The Wall Street Journal added fuel to the fire at Activision Blizzard by revealing some troubling details about CEO, Bobby Kotick, and his own behaviour. Sources claimed that Kotick knew about some instances of harassment within the company and allowed it to continue, even going as far as to protect the jobs of certain executives. Kotick himself has also been accused of harassing former employees.

This, in conjunction with the on-going lawsuit brought on by the state of California, as well as employee strikes and unionisation efforts, caused Activision Blizzard shares to begin dropping in value.

According to CNBC, this is precisely when Microsoft stepped in. Following the WSJ article, Phil Spencer made it known publicly that Xbox is “re-evaluating its relationship” with Activision and he made good on that by opening up acquisition talks that same week. The near $70 billion deal was hammered out within just a few months – less time than it took for Sony to acquire Bungie, or for Microsoft to acquire Zenimax/Bethesda.

It wasn't just opportunism that netted Microsoft the deal. Apparently, there were several other unnamed companies seeking to acquire Activision Blizzard, one of which may have been Facebook, but this is currently unconfirmed. Other options were also explored, such as the idea of selling off Blizzard on its own, or taking Activision Blizzard off the stock market and going back to private funding.

Ultimately though, Microsoft offered the best deal and the company is already invested in cleaning up Activision Blizzard once it merges with Microsoft. Before we get to that though, the deal needs to be approved by regulators, and as the largest acquisition in gaming history, there will be plenty of scrutiny from regulators across the world. Currently, Microsoft expects to finalise the deal in the first half of 2023.

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KitGuru Says: What jumps out to me here is that several other companies were also apparently in the mix for the acquisition. If we had to speculate, these would have to have been ‘big tech' companies, like Microsoft, Google, Amazon, Facebook, as rival gaming publishers like EA, Ubisoft etc, would not have had the funds to even come close to outbidding a giant like Microsoft. 

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