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Author: Alan LittleDate: 2022-01-19

Activision Blizzard (ATVI) +30% after Microsoft (MSFT) agrees $68.7bn acquisition

Microsoft (MSFT) rocked the gaming industry on Tuesday after announcing plans to buy video game studio Activision Blizzard (ATVI) in a huge $68.7bn deal.

Activision Blizzard (ATVI) shares jumped 25.5% in trading on Tuesday after Microsoft (MSFT) announced plans to buy the video game company in a colossal $68.7bn all-cash deal.

The acquisition is set to be finalised by 2023 at the latest, and if everything goes smoothly, it will be Microsoft’s biggest acquisition by some margin, dwarfing its recent $7.5bn deal to bring ZeniMax Media into the fold.

CEO Satya Nadella said that the deal was yet another sign of its commitment to invest “deeply in world-class content, community and the cloud to usher in a new era of gaming”.

Activision has some of the most prized franchises in the gaming industry, with Call of Duty, Overwatch and Warcraft among those currently played by huge audiences across PC and consoles.

At last count, Activision’s games attracted 400 million active players every month, with many of its franchises earning billions of dollars.

Microsoft is now set to add Activision’s catalogue of titles to its Game Pass service, but it remains to be seen whether they will be exclusive to its platform in the future.

Meanwhile, current Activision CEO Bobby Kotick is set to remain in his role until the acquisition is completed, though he will now report to Phil Spencer, Microsoft Gaming CEO.

It is normal for companies targeted in buyouts to trade higher after a major announcement, and that was true during early trading on Tuesday.

Activision shares soared 25.5% to $82.03, while Microsoft traded down 1.95% at $304.15.

The $68.7bn deal means that Microsoft paid around $95 per share to acquire Activision, which is 45% higher than the latter’s closing price on Friday.

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