Microsoft is planning to buy Activision Blizzard (WoW, Call of Duty, Diablo 3): If the deal goes through, it would be the largest purchase in gaming history. As now made clear by a report to the US Securities and Exchange Commission, the SEC, the purchase began just 3 days after a Wall Street Journal report had put CEO Bobby Kotick under great pressure. The report clarifies how incredibly fast the discussion about the massive merger actually proceeded.
This is the situation:
- On January 18, 2022, it became known that Microsoft is planning to buy Activision Blizzard. The purchase price is about $68.7 billion.
- On November 16, 2021, a report from the Wall Street Journal was published, accusing Activision Blizzard CEO Bobby Kotick of having knowledge of abuse cases within the company. The stock price of Activision Blizzard then dropped by several percentage points.
- As it has now been revealed, the head of Xbox began initiating the purchase of Activision Blizzard on November 19, immediately after the report about Kotick. He apparently entered through open doors. It took only 2 months until the official announcement of the acquisition offer, which was extremely fast.
Activision Blizzard officially explains the timeline of the purchase
Where do the new information come from? The new information is highly official. The information comes from a letter to the shareholders of Activision Blizzard, in which they are urged to agree to the merger with Microsoft. There is a section on “the background of the merger” on page 30 (via sec.gov).
Here the exact sequence of the offer is summarized:
On November 19, Xbox head Phil Spencer and Activision Blizzard CEO Bobby Kotick spoke about other topics when Spencer asked the CEO if he had time for a conversation with Microsoft’s head the next day. They wanted to discuss “strategic opportunities between Activision Blizzard and Microsoft”.
After that, everything proceeded at a daily pace, with various conversations and meetings taking place on all levels. Everything went remarkably smoothly.
At the end of November, a negotiation about the stock price took place: Activision Blizzard was able to negotiate with Microsoft from $80 to $95. Basically, however, from the beginning of the negotiations, everything indicated that both sides had a strong interest in making the deal happen.
The process also appears to be significantly accelerated.
Someone wanted to buy Blizzard individually
What else is interesting? The report also contains a passage that on December 6, a person expressed their desire to partially or fully purchase the “business unit Blizzard”.
However, the board had doubts about the person’s ability to approve such a transaction. Additionally, they feared there might be disruptions, so the board decided not to engage in discussions with the potential buyer.
Kotick gets $410 million instead of dismissal
This makes the matter particularly noteworthy: Two months for a merger of this magnitude is extremely fast.
The timing of the offer coming just as CEO Kotick was under significant pressure is also striking. Kotick stated in an interview that the sexism scandal was not a decisive factor in the decision to sell Activision Blizzard.
As the website Kotaku notes, Bobby Kotick would receive about $410 million if the deal goes through when he liquidates his shares. Just a few weeks ago, it appeared that Bobby Kotick might be forced to step down under public and employee pressure. Apparently, the acquisition offer came at the ideal time.
In Kotick’s portrayal, the sale sounded quite different:
Activision Blizzard explains why they had to sell themselves instead of buying EA
