Microsoft buys game maker Activision Blizzard for about $70 billion

(Wikimedia Commons image)
(Wikimedia Commons image)
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Updated 19 January 2022

Microsoft buys game maker Activision Blizzard for about $70 billion

Microsoft buys game maker Activision Blizzard for about $70 billion
  • Deal will turn Microsoft, maker of the Xbox gaming system, into one of the world’s largest video game companies
  • Microsoft CEO Satya Nadella vows to address issues of misconduct and unequal pay against Activision

RIYADH: Saudi Arabia’s sovereign wealth fund is set to see a $1.1 billion boost to its investment in Activision Blizzard after Microsoft agreed to buy the video game maker, Bloomberg reported.

The Public Investment Fund, which first started building a position at the end of 2020, owned about 37.9 million shares in Activision at the end of September, according to public filings.

The fund built its stake over the last three months of 2020 and the first half of 2021.

Microsoft will pay $95 a share in cash valuing the stake at $3.6 billion, up from $2.5 billion at Friday’s close.

If the deal is completed, it will help rescue PIF’s bet on the gaming publisher, whose shares had fallen more than a third from the time its investment was first reported to last week.

While filings don’t show the purchase price, if the fund paid the average price in each of those three quarters, its stake would’ve been acquired at an average of about $89 per share.

Microsoft is paying nearly $70 billion for Activision Blizzard, the maker of Candy Crush and Call of Duty, to boost its competitiveness in mobile gaming and virtual-reality technology.

The all-cash $68.7 billion deal will turn Microsoft, maker of the Xbox gaming system, into one of the world’s largest video game companies. It will also help it compete with tech rivals such as Meta, formerly Facebook, in creating immersive virtual worlds for both work and play.

If the deal survives scrutiny from US and European regulators in the coming months, it could be one of the biggest tech acquisitions in history. Dell bought data-storage company EMC in 2016 for around $60 billion.

Activision has been buffeted for months by allegations of misconduct and unequal pay. Microsoft CEO Satya Nadella addressed the issue Tuesday in a conference call with investors.

“The culture of our organization is my No. 1 priority,” Nadella said, adding that ”it’s critical for Activision Blizzard to drive forward” on its commitments to improve its workplace culture.

Activision disclosed last year it was being investigated by the Securities and Exchange Commission over complaints of workplace discrimination and in September settled claims brought by US workforce discrimination regulators. California’s civil rights agency sued the Santa Monica-based company in July, citing a “frat boy” culture that had become a “breeding ground for harassment and discrimination against women.”

Wall Street saw the acquisition as a big win for Activision Blizzard Inc. and its shares soared 25 percent in trading Tuesday, making up for losses over the past six months since California’s discrimination lawsuit was filed. Shares of Microsoft slipped about 2 percent.

HIGHLIGHT

Acquisition to push Microsoft past Nintendo as the third-largest video game company by global revenue, behind Playstation-maker Sony and Chinese tech giant Tencent

Last year, Microsoft spent $7.5 billion to acquire ZeniMax Media, the parent company of video game publisher Bethesda Softworks, which is behind popular video games The Elder Scrolls, Doom and Fallout. Microsoft’s properties also include the hit game Minecraft after it bought Swedish game studio Mojang for $2.5 billion in 2014.

The Redmond, Washington, tech giant said the latest acquisitions will help beef up its Xbox Game Pass game subscription service while also accelerating its ambitions for the metaverse, a collection of virtual worlds envisioned as a next generation of the Internet. While Xbox already has its own game-making studio, the prospect of Microsoft controlling so much game content raised questions about whether the company could restrict Activision games from competing consoles, although Nadella promised the deal would help people play games “wherever, whenever and however they want.”

The acquisition would push Microsoft past Nintendo as the third-largest video game company by global revenue, behind Playstation-maker Sony and Chinese tech giant Tencent, according to Wedbush Securities analyst Daniel Ives.

“Microsoft needed to do an aggressive deal given their streaming ambitions and metaverse strategy,” Ives said. ”They’re the only game in town that can do a deal of this size with the other tech stalwarts under massive tech scrutiny.”

Meta, Google, Amazon and Apple have all attracted increasing attention from antitrust regulators in the US and Europe, but the Activision deal is so big that it will also likely put Microsoft into the regulatory spotlight, Ives said. Microsoft is already facing delays in its planned $16 billion acquisition of Massachusetts speech recognition company Nuance because of an investigation by British antitrust regulators.

Microsoft is able to make such a big all-cash purchase of Activision because of its success as a cloud computing provider. But after years of focusing on shoring up its business clients and products such as the Office suite of email and other work tools, Ives said Microsoft’s failed 2020 attempt to acquire social media platform TikTok may have “really whet the appetite for Nadella to do a big consumer acquisition.”

Pushback against the deal was immediate from consumer advocacy groups.

“No way should the Federal Trade Commission and the US Department of Justice permit this merger to proceed,” said a statement from Alex Harman, competition policy advocate for Public Citizen. “If Microsoft wants to bet on the ‘metaverse,’ it should invest in new technology, not swallow up a competitor.”

BACKGROUND

Activision was formed in 1979 by former employees of Atari Inc., a pioneer in arcade games and home video game consoles.

White House press secretary Jen Psaki had no comment on Microsoft’s announcement at her briefing Tuesday, but emphasized the Biden administration’s recent moves to strengthen enforcement against illegal and anticompetitive mergers.

Started in 1979 by former Atari Inc. employees, Activision has created or acquired many of the most popular video games, from Pitfall in the 1980s to Guitar Hero and the World of Warcraft franchise. Bobby Kotick, 59, has been CEO since 1991.

Microsoft said it expects the deal to close in its 2023 fiscal year, which starts in July. It said Kotick will continue to serve as CEO. After the deal closes, the Activision business unit would then report to Phil Spencer, who has led Microsoft’s Xbox division and will now serve as CEO of Microsoft Gaming.

Kotick survived a number of executive shakeups at Activision last year after a series of controversies stemming from allegations of a toxic workplace culture. A shareholder lawsuit in August said the company failed to disclose to investors that it was being investigated in California and that it had workplace culture issues that could result in legal problems.

Activision reached a deal in September with the US Equal Employment Opportunity Commission to settle claims that followed a nearly three-year investigation. The agency said Activision failed to take effective action after employees complained about sexual harassment, discriminated against pregnant employees and retaliated against employees who spoke out, including by firing them.

Microsoft has also been investigating its own practices toward sexual harassment and gender discrimination, opening an inquiry last week sought by investors at its annual shareholders meeting in November. The company committed to publishing a report later this year on how it handles harassment claims, including past allegations involving senior leaders such as co-founder Bill Gates.
 


Bank of England official warns of tough times for crypto

Bank of England official warns of tough times for crypto
Updated 25 sec ago

Bank of England official warns of tough times for crypto

Bank of England official warns of tough times for crypto
  • G7 to discuss crypto-asset regulation, says French central banker

RIYADH: Investors in crypto currencies should expect more difficult times ahead as tightening financial conditions around the world stoke appetite for safer assets, Bank of England Deputy Gov. Jon Cunliffe said on Tuesday.

Asked at a Wall Street Journal conference if rising interest rates would ramp up pressure on crypto currencies, Cunliffe said: “Yes, I think as this process continues, as (quantitative tightening) starts in the US ... I think we’ll see a move out of risky assets.” Cunliffe added that the conflict in Ukraine also had the potential to cause a renewed flight to safer assets.

Bitcoin, the world’s largest cryptocurrency, fell as low as $25,401 on Thursday, its lowest since Dec. 2020. It hit a record high of $69,000 in November. 

However, it traded higher on Tuesday, up 0.2 percent to $30,418 as of 08:52 a.m. Riyadh time.

Ether, the second most traded cryptocurrency, was priced at $2,077, up 0.32 percent, according to data from CoinDesk.

G7 meeting

The regulation of crypto-assets is likely to be discussed at a meeting of Group of Seven finance chiefs this week in Germany, French central bank head Francois Villeroy de Galhau said on Tuesday.

“What happened in the recent past is a wake-up call for the urgent need for global regulation,” Villeroy told an emerging markets conference in Paris, referring to recent turbulence in crypto-asset markets.

“Europe paved the way with MICA (regulatory framework for crypto-assets), we will probably ... discuss these issues among many others at the G7 meeting in Germany this week,” he added.

Grayscale to launch digital assets

Grayscale will list an exchange-traded fund in Europe made up of companies representing the “Future of Finance,” the world’s largest cryptocurrency asset manager said in a statement on Monday. 

The ETF, tracking the “Bloomberg Grayscale Future of Finance Index,” will be listed on the London Stock Exchange, Italy’s Borsa Italiana and Germany’s Deutsche Börse Xetra and begin trading on May 17. It is the first time that US-based Grayscale has listed a fund in Europe.

The index contains a mixture of companies involved in digital currencies including asset managers, exchanges, brokers, technology firms, as well as firms directly involved in cryptocurrency mining. “For us, the digital economy is primarily being driven through the proliferation of digital assets,” said Grayscale CEO Michael Sonnenshein.


Digital transformation, women participation are the need of the hour, says VP Visa CEMEA

Digital transformation, women participation are the need of the hour, says VP Visa CEMEA
Updated 17 May 2022

Digital transformation, women participation are the need of the hour, says VP Visa CEMEA

Digital transformation, women participation are the need of the hour, says VP Visa CEMEA

RIYADH: In a post-pandemic world, digital transformation has been one of the main changes for companies and economies as a whole.

In an exclusive interview with Arab News on the sidelines of the Arab Women Forum in Dubai, Visa CEMEA Vice President of Marketing Christine Harb emphasized the need for digital transformation and women’s representation.

“I believe that digital transformation is done in multiple phases. There are pretty traditional organizations in the way they operate and are trying to move into a more agile space,” she said.

Harb added: “When you look at how digital is transforming the world and the metaverse impacting on organizations, there is a need to rethink how people collaborate and engage. So it’s not just about making sure that you have the right tools or enabling employees and people to connect.”

She explained that the shift is not only in digitizing the economy but also in how women’s representation has been a focus for organizations and educational spheres.

“Now, we are already equipped. So maybe we are on the right track. But, still, a lot needs to be done, mainly around policies and regulations that would protect women and open new doors to them, when it comes to, you know, bigger roles, but also allowing them to be their authentic selves,” she concluded.


Commercial Bank of Kuwait plans to digitize, says CEO

Commercial Bank of Kuwait plans to digitize, says CEO
Updated 17 May 2022

Commercial Bank of Kuwait plans to digitize, says CEO

Commercial Bank of Kuwait plans to digitize, says CEO

DUBAI: Elham Mahfouz, the chief executive officer of the Commercial Bank of Kuwait, said that robots will play a major role in the future, with 85 million jobs expected to be taken over in the next two to three years.

Speaking to Arab News at the Arab Women Forum, Mahfouz said that the bank’s next plan is digitization and that, in the next two to three years, the look of banks will be different.

CBK is the only bank to have SwatchPAY, which is a smart-watch payment service, she informed.

Beginning her journey in banking around 35 years ago, Mahfouz climbed up the ladder after starting as a credit analyst. She has been the CEO of the bank for the last eight years, she informed.

“Being in a high position can favor the institution if you want to implement certain kinds of dreams that you have to get the institution in a certain way and pave the way with the team,” she added.

Mahfouz told Arab News that one of the things that stood out to her as a woman working in the banking sector was getting more support from males than females.

Self-development, focus, and patience are factors that have influenced her journey to reaching the top post, Mahfouz said.

She added that the following generations are tech-savvy and are very smart when it comes to technological advances. However, Mahfouz said they have to have patience and read more.


Women should not relinquish their rights in business, says Suzy Kanoo

Women should not relinquish their rights in business, says Suzy Kanoo
Updated 17 May 2022

Women should not relinquish their rights in business, says Suzy Kanoo

Women should not relinquish their rights in business, says Suzy Kanoo

DUBAI: When it comes to taking a huge step like running a family business, most entrepreneurs would flinch, especially in a male-dominated industry. Female successors would instead pass their rights to a male than take the path of leadership.

In an exclusive interview with Arab News, the CEO and president of Khalil bin Ebrahim Kanoo Co. and International Motor Trading Agency, Suzy Kanoo, shared her advice on what women should do when put in that position, and it’s not relinquishing their rights.

Speaking on the sidelines of the Arab Women Forum event in Dubai, Kanoo, who has also authored “Hear Us Speak: Letters from Arab Women,” expressed that one of the main obstacles women face in the business world is not believing in themselves.

“The Japanese call it Ikigai. Find a purpose and passion, do it well, and make sure it benefits society. Whatever it is, anything that you think is insignificant isn’t insignificant for that individual. So, find that purpose and do it well,” she added.

Kanoo has been the voice of the Arab world, and her book discusses real-life stories about Arab women that have experienced physical or emotional abuse but outlived their circumstances.

“My book emphasizes that never let a male, whether a cousin or a brother, force you or coerce you into signing documents asking you to relinquish your rights of the family business,” she said.

Her book brought to light the circumstances of the marginalized women who succumbed to male domination and gave away what was rightfully theirs.

However, Kanoo feels those were different times. She finds Gen Z is the most empowered generation. They believe that nothing should stop them from achieving their goals. In addition, they understand technology better than the previous generations.

But the struggle is not over. Even emancipated women have to fight on multiple fronts. An accomplished writer and businesswoman, Kanoo is currently facing problems with the automotive business. Her production declined by 50-60 percent.

Does that mean she is letting off the reins? No chance. The feisty lady is expanding into different sectors, opening a restaurant from personal investments and launching an advisory company for blockchain technology.

 

 

 

 

 


Egypt expects $8bn investments in energy sector this year, minister says 

Egypt expects $8bn investments in energy sector this year, minister says 
Updated 17 May 2022

Egypt expects $8bn investments in energy sector this year, minister says 

Egypt expects $8bn investments in energy sector this year, minister says 

RIYADH: Egypts expects that the value of investment in the energy sector would range between $7 to $8 billion during the current fiscal year, the minister of petroleum and mineral resources told Alarabiya. 

Tarek El-Molla added that the figures were under review with international companies, noting that changes in global oil prices require increased investment plans.

He said the government is currently focusing on maximizing the use of natural resources, confirming that Egypt aims to return to the oil production levels of 5 years ago.