Activision Blizzard (ATVI) shares surged Tuesday after Microsoft (MSFT) said it would buy the 'Call of Duty' maker for just under $69 billion in the latest and largest mega-deal for the video game industry.
The all-cash deal will value Activision, which also publishes 'World of Warcraft', at $95.00 a share, the companies said, a 45% premium to its Friday closing price, with the deal making Microsoft -- which bought ZeniMax Media for $7.5 billion last March -- the world's third largest gaming group behind Tencent and Sony.
Activision CEO Bobby Kotick will continue to lead Activision, the companies said, but will report to Microsoft gaming CEO Phil Spencer. Microsoft will have access to 30 internal game development studios, as well as e-sports publishing capabilities, when the deal closes later this year, while helping build-out its XBox console offerings.
The Microsoft takeover follows last week's planned $12.7 billion takeover of Farmville maker Zynga (ZNGA) by Take-Two Interactive (TTWO).
"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," said CEO Satya Nadella. "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."
Activision shares were marked 25.5% higher in early afternoon trading Tuesday to change hands at $82.03 each. Microsoft shares, meanwhile, fell 1.95% to $304.15 each.
"For more than 30 years our incredibly talented teams have created some of the most successful games," said Kotick "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."
The deal also comes after Activision Blizzard confirmed it had fired or disciplined more than 80 employees in a months-long probe into allegations of sexual harassment at the video game making group.
Activision, which reached a settlement with the U.S. Equal Employment Opportunity Commission in September, has set aside $18 million to compensate victims of the allegations and said Kotick would take a modest pay cut as a result of the more than 700 reports of employee concerns at the company.
However, the "Call of Duty" maker denied a Wall Street Journal report suggesting Kotick had held back a comprehensive report on the probe, with the company committing to periodic updates in the coming months.
