Image

Image

Microsoft sees Activision Blizzard, and its games like Call of Duty, as key to its future. Credit...Benoit Tessier/Reuters

How the Activision deal got done

Microsoft’s $68.7 billion deal to buy Activision Blizzard is a blockbuster bid to transform the tech giant’s present and its future. If completed, it would be Microsoft’s largest-ever deal and the biggest all-cash acquisition in history. For such a momentous deal, it came together relatively quickly, we can report.

Microsoft seized on Activision’s troubles. Last summer, Activision was dogged by accusations that senior executives ignored sexual harassment and discrimination in its workplace, a controversy that eventually engulfed its C.E.O., Bobby Kotick. The company faced pressure from all corners — including from Microsoft, which said its gaming division was reviewing its ties to Activision. But the tech giant kept in regular contact with Kotick.

In December, with Activision’s stock down sharply, Microsoft reached out to Kotick with a takeover bid. Kotick dismissed the offer, but — eager to steer his beleaguered company to a safe home — told the software giant to come back with a better offer. Microsoft did, beginning a weekslong sprint to hammer out an agreement.

As part of its due diligence, Microsoft looked into the workplace accusations and determined that they were largely in the past, and that the controversy was manageable. That said, Kotick is expected to step down as Activision’s chief once the deal closes.