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Investing.com – Activision Blizzard stock (NASDAQ:ATVI) soared 38% in premarket trading Tuesday after Microsoft (NASDAQ:MSFT) said it will buy the video games publisher for $68.7 billion.
The all-cash offer values each Activision share at $95, a premium of over 45% to its Friday closing price of $65.39. U.S. markets were shut Monday for the Martin Luther King, Jr. holiday.
Demand for gaming has been booming with the pandemic only accelerating it as stuck-at home consumers found a way to engage themselves.
This acquisition will accelerate the growth in Microsoft’s gaming business across mobile, PC, console and cloud and will provide building blocks for the metaverse, the world’s second-most valued company said.
It also provides the maker of Xbox consoles a vast library of popular franchises such as Warcraft, Diablo and Candy Crush. Once the deal is secured, Microsoft will become the world’s third-largest gaming company by revenue, behind Tencent (OTC:TCEHY) and Sony (NYSE:SONY).
Bobby Kotick, who has led Activision for more than three decades, will continue to serve as its CEO.
Microsoft is Activision’s fourth largest customer and was said to be miffed with it because of series of allegations of sexual misconduct against top executives of the games publisher. Many of those officials have since left Activision or been fired. Those woes have weighed on the stock, which is down 28% in the past year.
