Microsoft has successfully completed its merger with Activision Blizzard, marking Microsoft’s largest deal in its 48-year history. This merger, which was initially announced in January 2022, involved Activision Blizzard becoming a wholly-owned subsidiary of Microsoft through a subsidiary named Anchorage Merger Sub Inc. This achievement follows extensive regulatory scrutiny and delays.
While Microsoft managed to address competition concerns raised by U.K. and European regulators and received a favorable ruling from a U.S. district judge, the U.S. Federal Trade Commission remains in opposition and is pursuing an appeal against the merger.
Microsoft plans to bring popular franchises from Activision, Blizzard, and King to its Game Pass and other platforms, as stated by Microsoft Gaming CEO Phil Spencer in a blog post.
In a separate development, Microsoft has been notified by the IRS (Internal Revenue Service) of a $28.9 billion back-tax claim, which includes penalties and interest, related to the tax years 2004 to 2013. This dispute revolves around how Microsoft allocated profits across different countries and jurisdictions during that period. Microsoft also mentioned that the proposed adjustments are linked to taxes paid under the Tax Cuts and Jobs Act (TCJA), which could potentially reduce the final tax liability by up to $10 billion. Microsoft plans to appeal the IRS’s claim, and the process is expected to take several years.
Despite these developments, analysts at BofA do not anticipate a significant impact on Microsoft’s earnings or free cash flow in the coming years. Microsoft’s stock price remained relatively stable for the week, closing at $327.73 on Friday.
After its eagerly awaited IPO last month, chip designer Arm Holdings (NASDAQ:ARM) received a string of top ratings from major brokerages. This marked the conclusion of the standard quiet period for Arm’s underwriters. Microsoft has successfully completed
Arm’s IPO was a significant success, raising $4.87 billion for its majority owner, SoftBank (TYO:9984), who holds a 90% stake in the company. This IPO became the largest listing of the year.