Investors don’t yet seem to buy in to the idea of Microsoft completing its $69 billion acquisition of Activision Blizzard Inc., which Activision shareholders approved Thursday (April 28), fearing that antitrust officials in the Biden administration will squelch the deal before it reaches the finish line.
Shares of the gaming juggernaut are trading at about $77, well below Microsoft’s $95-per-share offer, according to a Bloomberg report Thursday. Investors fear that the deal could be blocked or subject to delays even if it prevails, Matt Perault of New Street Research told Bloomberg. The deal will also need approval by other governments including the European Union and China, the report says.
The merger would make Microsoft the world’s No. 3 gaming company and would give it ownership over Call of Duty and World of Warcraft, among other titles, if it closes by the June 2023 deadline. Microsoft would also gain control of Candy Crush developer King, which made $2.58 billion in revenue last year.
SOC Investment Group, an activist shareholder group with a small Activision stake, encouraged their shareholders to vote down the deal, in part because it will mean Activision Chief Executive Officer Bobby Kotick will walk away from the transaction with more than $375 million.
The Federal Trade Commission will also review the Microsoft-Activision merger.
Related: Activision Blizzard Earnings Show the Metaverse in Gaming's Future
In February, Activision Blizzard missed its Q4 revenue and earnings-per-share targets, while it dealt with sexual discrimination and harassment claims, an SEC fine, and news of an FTC antitrust investigation into the Microsoft deal.
“This acquisition will accelerate the growth in Microsoft’s gaming business across mobile, PC, console and cloud and will provide building blocks for the metaverse,” the Redmond, Washington-based tech giant said in its January announcement.
Short- to medium-term, the deal would add to Microsoft’s own very substantial foothold in the gaming world as maker of the Xbox. The proposed acquisition raises the possibility of a console-based metaverse.
