Why Microsoft Shouldn't Have Bought Activision Blizzard

Microsoft (NASDAQ: MSFT) stunned the gaming industry on Jan. 18 by announcing that it would buy Activision Blizzard (NASDAQ: ATVI), one of the world's largest video game publishers, for $68.7 billion.

The all-cash deal values Activision at $95 per share, which represents a 43% premium to its closing price on Jan. 14. Microsoft expects to close the deal in fiscal 2023, which starts this July, and immediately become accretive to its adjusted earnings. It will also become the world's third-largest video game publisher by annual revenues after Tencent and Sony (NYSE: SONY).

Image source: Microsoft.

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Source Fool.com