Microsoft to acquire Activision Blizzard in landmark deal

In a landmark move for the consumer gaming industry, Microsoft has announced its plans to acquire Activision Blizzard.

The merger is set to create further opportunities for Microsoft's gaming business across mobile, PC, console and cloud while also providing a solid foundation for entry into the metaverse.

The company is set to purchase Activision Blizzard for USD$95.00 per share, in an all-cash transaction valued at $68.7 billion, inclusive of Activision Blizzard's net cash. This will cement Microsoft's position as one of the top three leaders in the gaming industry.

Part of the acquisition will include Microsoft inheriting some of the trademark franchises closely associated with Activision Blizzard and King studios such as  "Warcraft," "Diablo," "Overwatch," "Call of Duty" and "Candy Crush". In addition, the acquisition will encompass global eSports activities through Major League Gaming.

Bobby Kotick will continue to serve as the CEO of Activision Blizzard after 30 years in senior leadership with Activision and Blizzard. Once the deal has been closed, the Activision Blizzard business will report to Phil Spencer, the CE of Microsoft Gaming.

Microsoft chairman and CEO Satya Nadella says investing in new partnerships such as that with Microsoft will help towards the future possibilities within the gaming space.

"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," he says.

"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.

Spencer says that he is excited to be part of a partnership that will help make well-respected gaming material accessible to a broader range of markets and technologies.

"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.

Kotick believes a shared vision will launch the company to new heights within the consumer gaming space.

"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," he says.

The acquisition is also set to strengthen Microsoft's Game Pass portfolio with plans to launch Activision Blizzard games into Game Pass, which currently has over 25 million subscribers.

The final acquisition is subject to customary closing conditions and completion of regulatory review and Activision Blizzard's shareholder approval. The company says the deal is expected to close in the fiscal year of 2023 and will be accretive to non-GAAP earnings per share upon close. Both Microsoft and Activision Blizzard board members have indicated approval.