It’s been more than a month since Microsoft turned the entire industry on its head by announcing the takeover of Activision Blizzard. There followed many questions from players who wonder what will be the future of the studios of the American publisher. Today we know that Call of Duty will continue to be released on PlayStation for a very long time. Is this a maneuver to reassure the players and especially the authorities who might oppose the takeover which is not yet effective? Anyway, the “Securities and Exchange Commission” has just published a document that allows you to learn a little more behind the scenes of the takeover of Activision Blizzard.
Xbox and Activision Blizzard: Microsoft clarifies everything, including Call of Duty on PlayStation!
Backtrack
Let’s go back a few months. The American publisher Activision Blizzard has many times been singled out for denouncing inadmissible facts. Tongues were loosened and therefore revealed an atmosphere of permanent aggression within the group.
Petit hic, Bobby Kotick, PDG d’Activision Blizzard, was aware and did not act accordingly. He had notably interfered in a previous harassment story dating from 2017. At that time, it was regarding an employee who was the victim of abusive behavior on the part of Dan Bunting, co-president of the Treyarch studio and employee since the release of Call of Duty 5 : World at War.
For his part, the boss of Xbox, Phil Spencer, immediately reacted to be outraged by these unacceptable behaviors. In an email to his employees, he said he wanted to “evaluate all aspects of our relationship with Activision-Blizzard and make ongoing proactive adjustments.”
On behalf of his team, he also said he was “disturbed and deeply disturbed by the horrific events and actions” that are being reported in the press. “This type of behavior has no place in our industry,” said Phil Spencer on November 18.
Following these remarks, Phil Spencer immediately approached Activision Blizzard
We would like to recall these events, since they would have been decisive in the takeover of Activision Blizzard by Microsoft. Indeed, we learn today via a new document from the Securities and Exchange Commission that Phil Spencer immediately approached the other American giant to discuss the takeover which would be announced a few weeks later, despite his outraged email to Activision Blizzard.
On November 19, 2021, during an off topic conversation between Mr. Spencer and Mr. Kotick, Mr. Spencer brought up the fact that Microsoft wanted to discuss strategic opportunities between Activision Blizzard and Microsoft and asked if he was possible to have a call with Mr. Nadella the following day. Mr. Kotick agreed to participate in this discussion.
Without specifying what he had in mind, Phil Spencer wanted to extend the discussion to the highest peaks with the intervention of the CEO of Microsoft the next day. Thus, on November 20, Satya Nadella will discuss his interest in “exploring a strategic combination with Activision Blizzard”.
During a phone call on November 20, 2021 between MM. Kotick and Nadella, Mr. Nadella indicated that Microsoft was interested in exploring a strategic combination with Activision Blizzard.
The very close relationship between the two video game players will give rise to two months of intensive discussions before announcing the takeover publicly on January 18, 2022. It is possible to find all the details from page 31 of the document.
Other interested industry players!
If Microsoft did not hesitate to quickly approach Activision Blizzard for an acquisition, other companies have also taken advantage of the publisher’s situation to make proposals, including one who also mentioned his desire to buy the company. .
The Securities and Exchange Commission document mentions 5 other companies, here called companies A, C, DE and “Individual B”. The latter sent an email on December 6 to Mr. Kekky from Activision Blizzard to express his desire for acquisition.
Also on December 6, 2021, Mr. Kelly received an unsolicited email from an individual, whom we refer to as “Individual B”, indicating his desire to explore the potential acquisition of the company’s Blizzard business unit or potentially a total (or partial) takeover transaction with unidentified potential co-investors.
Ultimately, only Microsoft will come to an agreement with Activision Blizzard. The proposals of the other companies might not succeed for various reasons. For example, in the case of Company E, they said they were unable to complete a full acquisition of Activision Blizzard, especially since Microsoft was very quick and aggressive.
A blockage that might be expensive
The documents released by the Securities and Exchange Commission also allow us to learn a little more regarding the terms of the agreement. If the latter was blocked by the authorities, then Microsoft will be obliged to pay severance compensation to Activision Blizzard. It will go from 2 to 3 billion dollars in the event that it is canceled due to an “injunction arising from antitrust laws”.
Microsoft will also be confronted with the shareholder vote. If the latter oppose the merger of the two groups, then Microsoft will have to pay a termination indemnity of 2.27 billion dollars.
Recently, Nvidia’s $40 billion takeover of Arm was stalled due to regulatory concerns by the Federal Trade Commission. Proof that everything is not fixed and that changes can still occur. The FTC is also examining the case of Microsoft and Activision Blizzard.
Beautiful days for Bobby Kotick
If it is expected that Bobby Kotick leaves the company when the operation is concluded, the document makes it possible to learn that it will earn 410,142,075 dollars thanks to the 4,317,285 shares on a basis of 95 dollars per unit. If he still plans to stay, Microsoft will also have to pay him $14,592,302, just that!
Add to that the 2.2 million stock options that might be worth hundreds of millions more depending on their cost to exercise. Suffice to say that he will not be able to point to unemployment.
