This, week Microsoft (MSFT) announced its plans to acquire Activision Blizzard (ATVI) in an all-cash offer for $68.7 billion. Including Activision's net cash position of $6.4 billion, the deal is valued at $95 per share. The deal is expected to close sometime in 2023 after regulatory approval. Activision has a number of strong gaming brands including Call of Duty, Candy Crush, Warcraft, Overwatch, Diablo etc. Microsoft can realize synergies and also expand into mobile gaming through this deal, which is why it is offering more than 20x Activision's trailing 12 month EBITDA ($3.4 billion). I am bullish on Activision stock in the near term, and neutral on Microsoft.
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