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Microsoft to buy Activision Blizzard in $68.7bn deal; UK real wages fall in cost of living crunch – business live Microsoft to buy Activision Blizzard in $68.7bn deal; UK real wages fall in cost of living crunch – as it happened
(32 minutes later)
Rolling coverage of the latest economic and financial newsRolling coverage of the latest economic and financial news
Just in: Microsoft is buying computer games developer Activision Blizzard in a $68.7bn blockbuster deal.Just in: Microsoft is buying computer games developer Activision Blizzard in a $68.7bn blockbuster deal.
Microsoft has announced it will pay $95 per share in cash for Activision Blizzard, the firm behind “Call of Duty”, a 45% premium, in the software giant’s biggest ever acquisition.Microsoft has announced it will pay $95 per share in cash for Activision Blizzard, the firm behind “Call of Duty”, a 45% premium, in the software giant’s biggest ever acquisition.
Microsoft says the deal will make it the world’s third-largest gaming company by revenue, behind Tencent and Sony. It will accelerate the growth of its gaming business across mobile, PC, console and the cloud -- and provide “building blocks for the metaverse”, it says.Microsoft says the deal will make it the world’s third-largest gaming company by revenue, behind Tencent and Sony. It will accelerate the growth of its gaming business across mobile, PC, console and the cloud -- and provide “building blocks for the metaverse”, it says.
The planned acquisition will give Microsoft popular gaming franchises including “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty” and “Candy Crush,” and global eSports activities through Major League Gaming.The planned acquisition will give Microsoft popular gaming franchises including “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty” and “Candy Crush,” and global eSports activities through Major League Gaming.
Satya Nadella, chairman and CEO of Microsoft, explains:Satya Nadella, chairman and CEO of Microsoft, explains:
Activision Blizzard has faced mounting pressure over its response to sexual misconduct allegations at the firm, including sexual harassment, sexual assault and gender discrimination.Activision Blizzard has faced mounting pressure over its response to sexual misconduct allegations at the firm, including sexual harassment, sexual assault and gender discrimination.
Last November, employees staged a walkout to protest about the company’s handling of these allegations, which are being investigated by US regulators, and shareholders called on CEO Bobby Kotick to resign.Last November, employees staged a walkout to protest about the company’s handling of these allegations, which are being investigated by US regulators, and shareholders called on CEO Bobby Kotick to resign.
Yesterday, Activision Blizzard said it has fired or pushed out more than three dozen employees and disciplined another 40 since July to address allegations of sexual harassment and other misconduct at the videogame company.Yesterday, Activision Blizzard said it has fired or pushed out more than three dozen employees and disciplined another 40 since July to address allegations of sexual harassment and other misconduct at the videogame company.
Microsoft says today that Kotick will continue to serve as CEO of Activision Blizzard, and he and his team will “maintain their focus on driving efforts to further strengthen the company’s culture and accelerate business growth”.Microsoft says today that Kotick will continue to serve as CEO of Activision Blizzard, and he and his team will “maintain their focus on driving efforts to further strengthen the company’s culture and accelerate business growth”.
Once the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO, Microsoft Gaming.Once the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO, Microsoft Gaming.
Time to wrap up... here are today’s main stories:
Goodnight. GW
Shares in Goldman Sachs have tumbled by 7% this morning, after net profits were hit by a jump in pay and bonus payments to its bankers.
Wealth correspondent Rupert Neate explains:
Stocks have closed lower in London, as anxiety over looming US interest rate rises dampen the mood.Stocks have closed lower in London, as anxiety over looming US interest rate rises dampen the mood.
The FTSE 100 index closed 48 points lower at 7563.5 points, 0.6% down on Monday’s two-year high.The FTSE 100 index closed 48 points lower at 7563.5 points, 0.6% down on Monday’s two-year high.
Industrial equipment hire firm Ashtead was the top faller, down 5%, followed online home sale portal Rightmove (-4.6%).Industrial equipment hire firm Ashtead was the top faller, down 5%, followed online home sale portal Rightmove (-4.6%).
Unilever fell another 4%, with ratings agency Fitch warning that its ambitions to buy GlaxoSmithKline’s consumer health assets would put its ‘A’ credit rating at risk because of the huge debt it would have to swallow.Unilever fell another 4%, with ratings agency Fitch warning that its ambitions to buy GlaxoSmithKline’s consumer health assets would put its ‘A’ credit rating at risk because of the huge debt it would have to swallow.
European markets had a weak day too, with Germany’s DAX dropping 1%.European markets had a weak day too, with Germany’s DAX dropping 1%.
Five payment companies including Mastercard have been fined a total of more than £33m for operating illegal cartels when providing prepaid cards for local authorities to distribute to vulnerable people.Five payment companies including Mastercard have been fined a total of more than £33m for operating illegal cartels when providing prepaid cards for local authorities to distribute to vulnerable people.
The companies were found by the Payment Systems Regulator to have broken competition law by agreeing not to compete with each other for the authorities’ custom.The companies were found by the Payment Systems Regulator to have broken competition law by agreeing not to compete with each other for the authorities’ custom.
The regulator said that by acting in this way, the providers may have denied the councils access to cheaper products, and vulnerable people may have missed out on better quality services.The regulator said that by acting in this way, the providers may have denied the councils access to cheaper products, and vulnerable people may have missed out on better quality services.
The cards in question were used to distribute welfare payments to vulnerable members of society, such as the homeless, victims of domestic violence and asylum seekers.The cards in question were used to distribute welfare payments to vulnerable members of society, such as the homeless, victims of domestic violence and asylum seekers.
Back in the UK, yet another energy firm has collapsed.Back in the UK, yet another energy firm has collapsed.
The owner of Bristol Energy has gone bust weeks after the struggling council-owned supplier assured its customers that the business was stable despite record-high gas market prices.The owner of Bristol Energy has gone bust weeks after the struggling council-owned supplier assured its customers that the business was stable despite record-high gas market prices.
The energy regulator, Ofgem, will appoint a new supplier to take on the 176,000 households affected by the collapse of its parent company, Together Energy, which is part-owned by Warrington borough council.The energy regulator, Ofgem, will appoint a new supplier to take on the 176,000 households affected by the collapse of its parent company, Together Energy, which is part-owned by Warrington borough council.
The energy company was forced to deny press reports earlier this year that it was on the brink of calling in administrators and told customers that the company was “stable” and operating on a “business as usual” basis.The energy company was forced to deny press reports earlier this year that it was on the brink of calling in administrators and told customers that the company was “stable” and operating on a “business as usual” basis.
Bristol Energy said it was “saddened” to announce its exit from the UK’s energy market but it was “untenable for us to continue”. It also denied press reports that suggested it had not bought enough gas and electricity to meet its customers’ needs.Bristol Energy said it was “saddened” to announce its exit from the UK’s energy market but it was “untenable for us to continue”. It also denied press reports that suggested it had not bought enough gas and electricity to meet its customers’ needs.
Together’s collapse makes it the 27th energy supplier to go bust since gas market prices began a steep ascent to record highs in August last year, leaving more than 2m households in need of a new supplier.Together’s collapse makes it the 27th energy supplier to go bust since gas market prices began a steep ascent to record highs in August last year, leaving more than 2m households in need of a new supplier.
Microsoft is acquiring Activision Blizzard in an attempt to dominate the metaverse, says Rupantar Guha, Principal Analyst at GlobalData’s Thematic Team:Microsoft is acquiring Activision Blizzard in an attempt to dominate the metaverse, says Rupantar Guha, Principal Analyst at GlobalData’s Thematic Team:
Factories in the New York region have reported that business conditions worsened sharply this month, as the omicron virus and ongoing supply-chain bottlenecks hit the sector.Factories in the New York region have reported that business conditions worsened sharply this month, as the omicron virus and ongoing supply-chain bottlenecks hit the sector.
The Empire State survey of business conditions tumbled to -0. 7 in January, a fall of 32.6 points to a reading of -0.7 this month. This was the first negative reading since June 2020 - anything below zero shows New York’s manufacturing sector contracted.The Empire State survey of business conditions tumbled to -0. 7 in January, a fall of 32.6 points to a reading of -0.7 this month. This was the first negative reading since June 2020 - anything below zero shows New York’s manufacturing sector contracted.
This is an early signal of the damage that Omicron has caused to the US economy.This is an early signal of the damage that Omicron has caused to the US economy.
The deal kicks off the metaverse ‘arms race’, says David Wagner, equity analyst and Portfolio Manager at Aptus Capital Advisors (via Reuters):The deal kicks off the metaverse ‘arms race’, says David Wagner, equity analyst and Portfolio Manager at Aptus Capital Advisors (via Reuters):
“We believe the deal will get done,” Wagner said, but cautioned:“We believe the deal will get done,” Wagner said, but cautioned:
Microsoft is to pay almost $70bn to buy Activision Blizzard, the publisher of mega franchises including Call of Duty, World of Warcraft and Candy Crush, in the biggest ever takeover in the tech and gaming sectors.Microsoft is to pay almost $70bn to buy Activision Blizzard, the publisher of mega franchises including Call of Duty, World of Warcraft and Candy Crush, in the biggest ever takeover in the tech and gaming sectors.
Microsoft said that the $68.7bn (£50.6bn) all-cash deal – which dwarfs its previous biggest, the $26bn takeover of LinkedIn in 2016 – will “provide the building blocks for the metaverse”.Microsoft said that the $68.7bn (£50.6bn) all-cash deal – which dwarfs its previous biggest, the $26bn takeover of LinkedIn in 2016 – will “provide the building blocks for the metaverse”.
It is the biggest deal in tech history, eclipsing the $67bn paid by Dell to buy the digital storage giant EMC in 2015.It is the biggest deal in tech history, eclipsing the $67bn paid by Dell to buy the digital storage giant EMC in 2015.
The deal will see the Xbox maker become the world’s third-biggest gaming company by revenue behind China’s Tencent and Japan’s Sony, maker of PlayStation games consoles.The deal will see the Xbox maker become the world’s third-biggest gaming company by revenue behind China’s Tencent and Japan’s Sony, maker of PlayStation games consoles.
“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,” said Satya Nadella, the chairman and chief executive of Microsoft.“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,” said Satya Nadella, the chairman and chief executive of Microsoft.
The deal comes after a tumultuous time for Activision Blizzard, which has 10,000 staff globally a market value of about $50bn and three $1bn gaming franchises, which has been affected by a string of allegations of sexual misconduct and discrimination involving senior executives.The deal comes after a tumultuous time for Activision Blizzard, which has 10,000 staff globally a market value of about $50bn and three $1bn gaming franchises, which has been affected by a string of allegations of sexual misconduct and discrimination involving senior executives.
More here:More here:
Victoria Scholar, head of investment at interactive investor, agrees that the deal will face antitrust scrutiny:Victoria Scholar, head of investment at interactive investor, agrees that the deal will face antitrust scrutiny:
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, says Microsoft has ‘come out swinging’ with a rather generous $68.7bn all-cash deal to buy Activision Blizzard:Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, says Microsoft has ‘come out swinging’ with a rather generous $68.7bn all-cash deal to buy Activision Blizzard:
Global gaming stocks are rallying after Microsoft announced its near $69bn takeover deal for Activision Blizzard.
Electronics Arts have jumped 6%, with Roblox 3% higher and France’s Ubisoft surging 10%.
The recent selloff in their shares and rising interest in gaming and the metaverse from megacaps such as Meta Platforms Inc. has raised expectations for more deals in the space, says Bloomberg:
Shares in Activision Blizzard have jumped 30% at the start of trading in New York.
They’ve risen to over $85, up from $65, but below the $95/share which Microsoft plans to pay:
There is already talk that antitrust regulators could take a close look at the deal, as it could lead to Microsoft restricting some Activision Blizzard games from running on other platforms.
Michael Hewson, chief market analyst at CMC Markets, says:
Freetrade’s equity analyst Paul Allison says Microsoft’s planned $68bn acquisition of Activision Blizzard could help it expand into augmented reality and virtual reality.
Phil Spencer, CEO of Microsoft Gaming, says in a blog post:
Spencer adds that Microsoft will extend its “culture of proactive inclusion” to Activision Blizzard, in a clear reference to the allegations of sexual misconduct and workplace discrimination at the games developer.
Just in: Microsoft is buying computer games developer Activision Blizzard in a $68.7bn blockbuster deal.
Microsoft has announced it will pay $95 per share in cash for Activision Blizzard, the firm behind “Call of Duty”, a 45% premium, in the software giant’s biggest ever acquisition.
Microsoft says the deal will make it the world’s third-largest gaming company by revenue, behind Tencent and Sony. It will accelerate the growth of its gaming business across mobile, PC, console and the cloud -- and provide “building blocks for the metaverse”, it says.
The planned acquisition will give Microsoft popular gaming franchises including “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty” and “Candy Crush,” and global eSports activities through Major League Gaming.
Satya Nadella, chairman and CEO of Microsoft, explains:
Activision Blizzard has faced mounting pressure over its response to sexual misconduct allegations at the firm, including sexual harassment, sexual assault and gender discrimination.
Last November, employees staged a walkout to protest about the company’s handling of these allegations, which are being investigated by US regulators, and shareholders called on CEO Bobby Kotick to resign.
Yesterday, Activision Blizzard said it has fired or pushed out more than three dozen employees and disciplined another 40 since July to address allegations of sexual harassment and other misconduct at the videogame company.
Microsoft says today that Kotick will continue to serve as CEO of Activision Blizzard, and he and his team will “maintain their focus on driving efforts to further strengthen the company’s culture and accelerate business growth”.
Once the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO, Microsoft Gaming.
The European Union is proposing to extend permission for banks in the bloc to continue using clearing houses in London for a further three years from June, its financial services chief says.
Mairead McGuinness had already said last year that such permission, known as equivalence, would be extended from June 2022, when it is due to expire.
A spokesperson for McGuinness said in a statement.
[thanks to Reuters]
Clearing houses are a vital part of the financial sector’s ‘plumbing’. They also allow users to “net their positions” by concentrating them in one place. And by sitting between deals, clearing houses can stop one default creating dangerous shockwaves through the market.
The post-Brexit “carry-over deal” currently allows banks from the bloc to access clearing houses in the City as before, meaning the €80trn euro clearing market continues to operate.
The Commission has been pushing for this business to shift back to the EU, where it would fall within its regulatory oversight. But as the City of London currently offers such deep liquidity pools, clearing operations has been slow to move.
Another clampdown: The UK’s regulator is tightening up European firms who have been using a temporary license to operate in the UK since Brexit.
The Financial Conduct Authority says it has already cancelled the temporary permissions of four firms, who, it says, failed to respond to mandatory information requests to show they had applied for a permanent licence to do business in the UK.
The FCA provides a temporary permissions regime to allow European firms operating in the UK via a passport when the Brexit transition period ended, so they could keep operating temporarily while they seek full authorisation in the UK.
But it warns today that firms who have no intention in applying for full authorisation, or if their authorisation application is refused, would be removed from the TPR.
Sushil Kuner, financial services lawyer at law firm Gowling WLG, says European firms should heed the FCA’s warning:
The UK government’s plan to strengthen rules on cryptocurrency promotions has been welcomed, although experts warn that it will not protect consumers from the full risks of crypto.
Bradley Rice, partner at law firm Ashurst, says the move could be “game changing.”
But Laura Suter, head of personal finance at AJ Bell says new rules will bring crypto adverts in line with other financial promotions - but warns that many people learn about cryptocurrencies from other sources:
Myron Jobson, personal finance campaigner at interactive investor, says the rules around crypto assets desperately needs modernising, to prevent people struggling to meet the cost of living being lured into high-risk products.
Israeli Prime Minister Naftali Bennett said funding for Iran could lead to “terror on steroids”, in an apparent warning against world powers easing sanctions against Tehran as they seek a new nuclear deal.
“The last thing you want to do ... is pour tens of billions of dollars into this apparatus. Because what will you get? Terror on steroids,” Bennett said in a video address to the World Economic Forum’s Davos Agenda.
Bennett also explained that as he runs Israel’s national Covid taskforce, he has an hour from 9am each day with all the agencies and ministries involved.
That helps make decisions about Covid-19 quickly
Also, pandemics are not only about medicine or biology, they’re also about society, the economy, education, logistics. It’s a ‘cross-discipline challenge, so you can’t “silo it” and leave running the nation only to doctors, Bennett adds.
The UK government has outlined plans to protect consumers from misleading claims by tightening rules over cryptocurrency adverts
Following a consultation into crypto assets, the Treasury has announced it plans to introduce legislation to address “misleading cryptoasset promotions”, amid worries that they could be missold.
The rules will bring crypto adverts into line with other financial advertising, ensuring they are fair and clear, it says, with new rules increasing consumer protection while “encouraging innovation”.
Around 2.3 million people in the UK are now thought to own a cryptoasset, but research suggests that understanding of what crypto actually is has fallen, suggesting that some users may not fully understand what they are buying, the Treasury says.
Chancellor of the Exchequer, Rishi Sunak said:
Advertising cryptoassets will be brought within the scope of existing financial promotions legislation, by amending the UK’s Financial Promotion Order. That means crypto will face the same standards as stocks, shares, and insurance products.
The advertising watchdog has alreayd clamped down on some irresponsible crypto adverts, including one which claimed “it’s time to buy” bitcoin.
My colleague Rob Davies reported last week that cryptocurrency firms bombarded Londoners with a record number of adverts on public transport during 2021....
.. and that the unregulated trading and promotion of crypto assets risks creating a new generation of addicts.