Microsoft is Buying Activision for $68.7B in an All-Cash Deal

Tech giant Microsoft revealed this week that the company will be acquiring Activision in a $68.7 billion all-cash deal.

The price means Microsoft will pay $95 per share for the American video game publisher based in Santa Monica, California.

Under the deal, Activision CEO Bobby Kotick will remain CEO during the transition. Microsoft said Activision as a company will report to Microsoft’s Xbox boss Phil Spencer after the deal closes.

Activision’s stock ended the day up more than 25%, closing at $82.31 per share on Tuesday while Microsoft’s shares closed down more than 2%.

This would be Microsoft’s largest acquisition to date, followed by its purchase of LinkedIn in 2016 for $26.2 billion.

Activision is known for popular games such as Call of Duty. Earlier in the week the company said that it fired dozens of executives following an investigation.

The Wall Street Journal reported Tuesday afternoon that Kotick is expected to step down after the deal closes. The CEO has faced calls to resign over the cultural problems within his company.

Microsoft said it expects to close the deal in its fiscal 2023.

“When we think about our vision for what a metaverse can be, we believe there won’t be a single, centralized metaverse,” Satya Nadella said on a call Tuesday morning where he discussed the deal.

Kotick said the deal came through after he realized Microsoft had the technology to push Activision forward in the burgeoning competition between tech companies to build the metaverse. The CEO made the remarks in an interview with CNBC’s Becky Quick on “Squawk on the Street.”

“The last two years in particular have shown how critical games are to helping people maintain a sense of community and belonging, even when they are apart,” Nadella said on a conference after the announcement.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.