CEO Bobby Kotick and Activision's board of directors tried to sell the company to other companies including Facebook parent Meta before taking a deal with Microsoft, it's claimed.
Bloomberg (opens in new tab) reports that "Kotick and the board weren't sold on Microsoft as the acquirer" and initially pursued deals with at least two other companies, one of them being Meta Platforms, according to sources privy to private conversations. As we now know, these talks didn't bear fruit, so Activision came back to the table with Microsoft, with the two companies apparently working over the 2021 holiday season to draft up the deal.
The near-$70 billion Microsoft Activision purchase is still in flux, but it's safe to say the merger is now much more than an idea. The two companies are in talks to close the deal during the 2023 fiscal year, which starts July 1, 2022 and ends June 30, 2023. If talks proceed smoothly and the deal is approved by regulating bodies, it could be finalized as early as this summer.
That said, multiple sources suggest that this deal may run into trouble with US lawmakers, among other parties. Mere hours after Microsoft announced its megaton acquisition, the US Department of Justice and Federal Trade Commission announced a sweeping review of antitrust merger guidelines as part of an ongoing push to better identify and regulate potentially illegal mergers. It's unclear how the agencies' guidelines will be updated as a result of this review, but the move could reasonably affect deals like Microsoft's latest acquisition, which was already likely to face intense scrutiny given Microsoft's position in tech and the sheer size of the deal.
Funnily enough, this move appears to have been at least partly catalyzed by Facebook, which notably purchased Instagram in 2012 and was sued by the FTC (opens in new tab) in December 2020 for alleged illegal monopolization. The FTC and DOJ's actions can also be attributed to changes in FTC leadership, not to mention a fairly recent executive order from president Joe Biden "promoting competition in the American economy."
Kotick will reportedly step down as CEO after this deal closes.