Reporting by XinZhiyuan
Edit: Time Peach La Yan
On January 18, 68.7 billion US dollars acquired Activision Blizzard, and Microsoft completed the largest acquisition in history! Recently, U.S. regulatory documents described the details of the takeover negotiations. It is worth noting that Microsoft immediately entered into acquisition negotiations after hearing about the Activision CEO scandal.
On January 18, Microsoft completed the largest acquisition in its history: it acquired Activision Blizzard for $68.7 billion.
The acquisition allegedly came in talks immediately after Microsoft Gaming CEO Phil Spencer heard about the Activision CEO scandal.
Recently, a U.S. regulatory document described the details of the acquisition negotiations.
Portal:
https://www.documentcloud.org/documents/21270320-activision-blizzard-form-prem14a#document/p42
5 companies rushed to talk, Microsoft started quickly
Activision Blizzard has been bogged down by multiple scandals for months, including a lawsuit in California accusing it of creating a culture of "persistent sexual harassment."
On November 16, 2021, the Wall Street Journal exposed Bobby Kotick's scandal of abusing female employees.
These included leaving voicemails in 2006, threatening to kill an assistant, and withholding information related to allegations of sexual misconduct from the company's board.
Spencer responded to the Wall Street Journal article's allegations in an email to Xbox employees two days later, telling employees that "we are evaluating our relationship with Activision Blizzard and are making positive adjustments."
At the time, Spencer almost immediately offered to buy the troubled company. It now appears that Spencer's idea of changing its relationship with Activision Blizzard has planted a seed for a future acquisition.
The first conversation between Kotick and Xbox chief Spencer took place on Nov. 19, the documents said.
Regulatory documents show that
"On November 19, 2021, during a conversation between Spencer and Kotick on different topics, Spencer raised Microsoft's interest in discussing strategic opportunities between Activision Blizzard and Microsoft, and asked if he could speak to Microsoft CEO Nader the next day."
Kotick informed Activision Blizzard's board of the conversation, on November 20 of last year, Kotick spoke with Nadella, who made it clear that Microsoft intends to buy the company.
This kicked off nearly two months of conversations between Microsoft and Activision Blizzard, which culminated in the announcement of the acquisition on Jan. 18.
Interestingly, at the time, in addition to Microsoft, Activision Blizzard was in contact with 4 other companies and one person about some kind of deal. The document refers to companies A, C, D and E, and the individual is named "Individual B".
None of these deals were successful for a variety of reasons, such as the fact that Company E said it could not make a full acquisition of Activision Blizzard.
All along, Microsoft has been moving forward quickly and aggressively with deals in place before some other companies have even entered.
In addition, Activision Blizzard's filing with the SEC also includes the terms of the merger agreement, which shows that if the merger is suspended due to an "antitrust law-induced injunction," Microsoft will pay Activision Blizzard a break-up fee of $2 billion to $3 billion.
Conversely, if Activision Blizzard's shareholders do not vote to approve the merger, they will have to pay Microsoft a $2.27 billion break-up fee.
The largest acquisition in history
Let's look back again at the whole process of this largest acquisition in history.
As early as September 21, 2021, Microsoft announced that it would acquire ZeniMax Media, the parent company of Bethesda, for $7.5 billion.
It's only been a few months, and gamers around the world have once again witnessed that what it means to be rich is "willful".
In January, January 18, 2022, Microsoft once again announced the largest acquisition in its history: it will spend $68.7 billion to buy game giant Activision Blizzard.
You know, Microsoft's net income in 2021 is only $61.27 billion.
In an official statement, Microsoft said it would buy game giant Activision Blizzard for $95 per share for $68.7 billion and an equity worth about $74 billion, the highest-ever acquisition Microsoft ever traded.
In addition, the transaction is cash-only, subject to regulatory approval and approval by Activision Blizzard's board of directors, and is expected to close in fiscal year 2023.
The acquisition includes iconic IP from Autovision, Blizzard and King Studios, including Warcraft, Diablo, Overwatch, Call of Duty and Candy Legends, as well as global esports events through Major League Baseball.
Activision Blizzard shares rose nearly 40% at one point after the session, and now close nearly 26% from the previous session to close at $82.31 per share.
"Stock God" Buffett 1 billion ahead of "God Operation"
Buffett's eyes are "god-accurate", and he preemptively invested nearly $1 billion in Activision Blizzard before Microsoft's acquisition.
As of December 31, 2021, Berkshire held 14.66 million Activision Blizzard stocks worth $975 million, according to the data. Then, before the formal acquisition, it was affected by the news of the acquisition, and the stock price soared all the way to more than $1.2 billion.
In this regard, people have speculated that this is an insider transaction between the gods, and the news must have been revealed in advance, otherwise the stock god would not be so "divinely accurate".
But, Buffett said, no!
Buffett said the stock purchases were made by two of Berkshire's investment managers — Berkshire investors Ted Weschler and Todd Combs — whose day-to-day work was independent of mine, and that the stock purchases were announced long before Microsoft blizzard blizzard.
Buffett sought to clarify the outside misinformation about Berkshire's stock purchases.
Every year in late February, Buffett publishes an annual open letter to shareholders, and next, it is expected that in this year's open letter to shareholders, Buffett will disclose these data.
Heavy bet on the "meta-universe"
In response to Microsoft's acquisition of Activision Blizzard, Microsoft, as the acquirer, talked about its own views.
Satya Nadella, chairman and CEO of Microsoft, said, "We are investing heavily in world-class content, communities, and the cloud."
Satya Nadella, a recently elected Member of the National Academy of Engineering, is a technical engineer who has been CEO of Microsoft since February 2014 and chairman of Microsoft last June, with a steady style but never lacking in boldness.
Since taking the helm of Microsoft, he has made significant contributions and international leadership in advancing enterprise computing infrastructure as a cloud service, as well as in the practice of socio-technical systems, from strategic decision-making to business operations.
Right now, Microsoft is working to usher in a new era of gaming that puts players and creators first, making games safe, inclusive, and shared by users.
At present, there are 3 billion active gamers in the world, the game industry is the world's largest and fastest growing entertainment industry, at present, Microsoft has fully entered the "meta-universe" and laid out the overall strategy of meta-universe development.
Satya Nadella said that the Xbox game platform will also join the "metacosm", and the acquisition will become an important boost for Microsoft to build a metacosm.
With the completion of the transaction, Microsoft officially became the third largest game company in the world, after Tencent and Sony.
Resources:
https://www.engadget.com/microsoft-activision-blizzard-sec-filing-225923532.html
https://www.theverge.com/22941636/microsoft-activision-blizzard-acquisition-sec-filing-came-together
https://www.thegamer.com/microsoft-activision-blizzard-bobby-kotick-abuse/
https://www.sohu.com/a/524024978_258858?spm=smpc.sub-channel.fd-news.3.16453044001327UCqJHG