Microsoft and Activision Blizzard: Negotiations Begin Three Days After Harassment Report

when the Microsoft announced the purchase of Activion Blizzard for a modest $68.7 billion — in a transaction that is now considered the largest to date for the IT and gaming industry — not only has the market been hit hard by what the deal could mean in terms of competition, but it also came as a surprise to many as the developer was going through a critical juncture.

Just to remind you: the company was even sued by the state of California, in the United States, after complaints that accused the studio of promoting this toxic and extremely sexist environment for women – which also culminated, for example, in the banning of the company to participate at the 2021 Game Awards. All this is a well-known matter of the time before the purchase by Microsoft.

What may come as a surprise is that the Redmond giant itself sealed the purchase agreement just three days after it was reported that the company’s CEO, Bobby Kotick, knew about the cases of sexual harassment and rape that occurred at the company, in addition to contributing to omit them, according to a report made at the time by the Wall Street Journal.

Microsoft and Activision Blizzard, the negotiation

This is what a recent regulatory report shows, which shows the timeline of how the agreement between the companies took place.

In the same month that the American newspaper’s report was published, Xbox boss Phil Spencer went so far as to claim that the company was reevaluating its relationship with Activision Blizzard and that the company’s leaders were “disturbed and deeply concerned by the events and horrible actions.”

And all this reassessment apparently resulted in the purchase: according to information from the US Securities and Exchange Commission (SEC) file and identified by the CNBCit was just a day after Spencer’s statement that the exec called Kotick and started the whole process.

According to the documentthe timeline can be summarized as follows:

  • November 16: WSJ article on Kotick’s misconduct case released;
  • On November 18: Spencer stated that Microsoft would be reassessing its relationship with Activision Blizzard in light of the disclosure;
  • November 19: Spencer contacted Kotick to discuss the relationship.
  • November 20: Satya Nadella, CEO of Microsoft, contacted Kotick with the intention of “exploring a strategic combination with Activision Blizzard”.

The moment was even opportune. Due to the accusations, the developer’s shares had gone into decline and reached a low of 11% shortly after the report of the WSJ.

The document also shows that at least four other companies contacted the Activision Blizzardwith the same interest in acquiring it, but none of them were named in the SEC report.

Still within the terms of the deal, Microsoft also agreed to pay Activision Blizzard a termination of up to $3 billion in the event of regulatory complications that could result in the deal not being completed — something that currently, with the very delicate regulatory environment in technology , could be a real possibility, as happened recently with Nvidia and ARM.

To date, the agreement is still in progress and verification. It is expected to be completed in Microsoft’s fiscal year, ending June 30, 2023. The intention with the purchase is to expand efforts in the gaming area.

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