Microsoft strikes deal with Activision 3 days after harassment report

Bobby Kotick in a black suit and white tie.

A photo: Brian Ah (Getty Images)

On November 16, 2021, a report was released claiming that Activision CEO Bobby Kotick was well aware of the harassment going on at his company. It also alleged that he himself abused women both on and off the job. Now, new documents show that three days later, Xbox head Phil Spencer called Kotick and began negotiations that eventually led to a major acquisition for $68 billion.

As noted CNBCthese new details about the Activision/Microsoft deal come from SEC regulatory filing published on Friday. In it, we get a complete and very detailed timeline of how and when negotiations between Microsoft and Activision began.

As already mentioned, November 16 had the effect of a bombshell. bloomberg report it was published that Kotick allegedly knew about allegations of sexual harassment in the company and that he himself was accused of mistreating employees. Following this report, Activision’s share price fell nearly $10.. On November 18, Spencer sent an email to Microsoft and Xbox staff that he “anxious and deeply troubled” on the report and stories coming out of Activision Blizzard. He also claimed to be revisiting the relationship between Xbox and Activision.

On November 19, the next day, Spencer called Kotik and, according to filing with the US Securities and Exchange Commission, while talking about something else, Spencer told the CEO that “Microsoft is interested in discussing strategic opportunities” between the two companies. Then he asked if Kotick and himself could talk to Microsoft CEO Satya Nadella the next day.

On November 20, Nadella made it clear that Microsoft wants to buy Activision.


Image: Xbox / Activation

Less than 8 weeks later, after shockingly fast negotiations between the two companies, Microsoft and Activision announced the acquisition on January 18, 2021. It’s amazing how quickly this historic mega deal was closed compared to the comparatively much smaller $3.6 billion Bungie. A deal with Sony that was announced on January 31st. According to Bungie and Sony, it took “months”..

The reason for this speed is probably due to the feeding frenzy that started in November. SEC filings say at least four other companies were interested in buying Activision. All companies are not named in the document, but apparently one company wanted to simply buy Blizzard. However, the Activision board felt it would be too difficult to implement. Looks like it Microsoft had to move quickly and aggressively in its negotiations because of other proposals and companies..

Kotaku contacted Activision and Microsoft regarding the timing and details disclosed in the SEC filing.

The document also reveals that no matter what happens, Kitty will leave with more money. If he leaves which will reportedly happen shortly after the deal closes, he could sell all of his Activision stock and walk away with $410,142,075, based on the $95 per share price Microsoft plans to pay. And if he decides to stay and Microsoft kicks him out anyway, Kotick will still be left with $14,592,302. Rich slugs don’t even get fired like normal people..

This new detailed timeline is eye-opening and seems to confirm reports that Microsoft did indeed follow Activision’s stock plunge after bloomberg report in November. It also seems that Phil Spencer and other Xbox employees were really concerned about the messages coming from Activision.but no too much alarmed or angered that they still see an opportunity to buy the company.

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