Activision Surges 40% On Reports Of Microsoft Acquisition

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by Tyler Durden
Tuesday, Jan 18, 2022 - 01:35 PM

In what looks to be the biggest deal news of the day, XBox maker Microsoft has confirmed plans to buy Activision Blizzard for $95/share, a premium of roughly 45% over Activision's previous closing price.

Microsoft apparently took advantage of the fact that Activision's share price had become depressed in recent weeks due to reports about the company's "toxic culture" (the reports had mostly focused on sexual harassment allegations and the large number of employees who had been fired over these claims). Activision's shares surged 40% on the news, while Microsoft shares retreated 2%.

MSFT has reportedly agreed to buy the established video-game maker, which has produced classic titles dating back to the 1990s, for some $50 billion, according to WSJ.

Microsoft said in its announcement that Bobby Kotick would stay on as Activision's CEO after the deal is completed, although he will report to Microsoft gaming chief Phil Spencer.

The deal would greatly expand the company's video game business, adding a number or successful franchises to its stable. If consummated, the all-cash deal would also become Microsoft's biggest acquisition by valuation; Activision-Blizzard's pricetag is roughly double that of LinkedIn, which MSFT decided to buy back in 2016.