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Activision Blizzard shareholders approve Microsoft buyout, but it’s not a done deal

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Activision Blizzard’s shareholders have overwhelmingly approved Microsoft’s offer to buy the company for $95 a share. As Bloomberg points out, however, the vote doesn’t mean that the acquisition is a done deal, and the Wall Street crowd isn’t fully convinced it will happen. 

If big investors believed it were a sure thing, you’d expect them to buy up Activision Blizzard shares at any price below $95, since that’s what Microsoft is going to pay for them—it’s like buying a dollar for less than a dollar. Even if you’re only getting a tiny discount, you may as well take the deal. Activision Blizzard shares are currently going for $77, however. That’s a big discount, suggesting low confidence that the $95 per share buyout will actually happen.

The agency that could stop the acquisition is the US Federal Trade Commission, which happens to be particularly concerned about just this kind of merger.

“Evidence suggests that decades of mergers have been a key driver in consolidation across industries, with this latest merger wave threatening to concentrate our markets further,” FTC chair Lina Khan said earlier this year. “…Industry consolidation and weakened competition have denied Americans of an open economy, with workers, farmers, small businesses and consumers paying the price.”

In March, a group of organizations which includes the Communications Workers of America—the union working to organize Call of Duty QA workers at Raven Software—petitioned the FTC to scrutinize the deal. The group argued that the deal will have anticompetitive effects, and that the lack of union membership among Microsoft employees is evidence of union suppression.

Microsoft said that it “respects Activision Blizzard employees’ right to choose whether to be represented by a labor organization” and “will honor those decisions” should the acquisition take place.

It’ll have to: Last Friday, the US National Labor Relations Board gave Raven Software QA workers the go-ahead to hold a union election after Activision Blizzard did not voluntarily recognize the union. Ballots will be counted May 23, and a majority vote can establish the first collective bargaining unit at a major US game studio.

Although 98% of the Activision Blizzard shares represented in today’s vote approved of the acquisition, there was some dissent among shareholders. The SOC Investment Group, which is dedicated to “organizing workers’ capital into an effective voice for corporate accountability,” urged shareholders to vote against the Microsoft acquisition. The group argued that Activision Blizzard is being undervalued due to “the board’s incompetent handling” of the 2021 California lawsuit and the sexual harassment allegations within, and said it doesn’t believe the deal is viable anyway, given the FTC’s increased scrutiny of consolidation.

“Activision shareholders would be better served by replacing the incumbent board with directors that would allow the company to assume its real potential, including actively engaging with and empowering Activision Blizzard employees in their effort to rebuild the corporate culture and restore the company’s reputation,” said the investment group.

If it makes it past the FTC, the approximately $70 billion deal will become Microsoft’s largest acquisition ever.

“Subject to customary closing conditions and the completion of regulatory review, the proposed transaction is expected to close in Microsoft’s fiscal year ending June 30, 2023,” Activision Blizzard said in a press release.

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