18 Jan 2022

Microsoft and Activision Blizzard turn to Skadden, Simpson Thacher and Weil for $68.7bn takeover

Metaverse-focused deal to make Microsoft third-largest gaming company is expected to attract regulatory scrutiny

Call of Duty Warzone video game. Playing video game on Playstation 4.

Rokas Tenys; Shutterstock

Skadden Arps Meagher & Flom, Simpson Thacher & Bartlett and Weil Gotshal & Manges are advising on Microsoft’s landmark $68.7bn acquisition of Activision Blizzard. 

Microsoft has claimed the deal, announced today and expected to close in 2023, will make it the world’s third-largest gaming company by revenue behind Tencent and Sony as it looks to develop its metaverse platforms. 

Skadden is acting for Activision Blizzard, the Santa Monica-based gaming giant behind popular gaming franchises including Call of Duty, Spyro, Crash Bandicoot and Tony Hawk’s Pro Skater 2. Simpson Thacher is legal counsel to Microsoft, with Weil advising the multinational as additional counsel on antitrust. 

Simpson Thacher’s New York-based team consists of M&A partners Alan Klein, Anthony Vernace and William Allen, tax partner Jonathan Goldestein, executive compensation and benefits partner Greg Grogan, intellectual property partner Lori Lesser and litigation partner Brooke Cucinella. 

Palo Alto-based capital markets partner Bill Bretani and Washington DC-based regulatory partners Abram Ellis and Mick Tuesley also advised on the transaction. 

Weil’s team, meanwhile, consists of partners Michael Moiseyev, Megan Granger and Vadim Brusser in DC, while partners Jenine Hulsmann and Niklas Maydell advised on the deal from London and Brussels respectively. 

Skadden’s line-up on the deal includes M&A partners Kenton King and Sonia Nijjar, executive compensation partner Regina Olshan, antitrust partners Steven Sunshine, Maria Raptis, Bill Batchelor, Ingrid Vandenborre, and Andrew Foster, IP partner Ken Kumayama and tax partner Nathan Giesselman, according to a report by Bloomberg Law

The deal marks Microsoft's largest acquisition yet, skyrocketing past the $26bn it paid to acquire Linkedin in 2016 and is expected to attract significant regulatory scrutiny.

Activision Blizzard CEO Bobby Kotich will continue to serve in his role upon completion of the deal, which will be subject to customary closing conditions and completion of regulatory and shareholder reviews. 

Satya Nadella, Microsoft chairman and CEO, said: “Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms.”

By acquiring Activision Blizzard, Microsoft hopes to “usher in a new era of gaming that puts players and creators first” by making gaming “safe, inclusive and accessible” to all users, Nadella said. 

The deal continues a record run of M&A that last year saw global deals smash through the $5tr barrier for the first time on record, much of it driven by the US tech sector.

Simpson Thacher was sixth, Skadden seventh, and Weil 14th in Refinitiv's 2021 global M&A legal adviser ranking by value.
 

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