Rival Bidding War Looms for Activision Blizzard
Rumors suggest that if Microsoft's acquisition of Activision Blizzard falls through, other potential buyers may be waiting in the wings
There are whispers in the industry that if Microsoft's planned acquisition of Activision Blizzard falls through, Comcast might emerge as a potential buyer. While the appeal process for Microsoft's $69 billion deal continues, some analysts are speculating that Comcast, which acquired British broadcaster Sky for $39 billion in 2018, could be interested in acquiring the maker of Call of Duty and World of Warcraft. As the largest cable provider in the US, Comcast is unable to acquire any more direct rivals due to antitrust regulations. However, the company is reportedly exploring opportunities in other industries as its stock price has taken a hit, dropping by one-third since its peak in 2021. This includes rumored discussions between Comcast-owned NBCUniversal and EA in mid-2022 about a possible merger.
The possibility of Comcast acquiring Activision Blizzard if Microsoft fails to do so is not impossible, according to industry experts. Bank of America analyst Jessica Reif Ehrlich believes that the failed talks with EA serve as an indication that "anything could happen," as reported by TheMiddleMarket. Bloomberg Intelligence analyst Geetha Ranganathan also supports this view, stating that media content is the "missing piece" in Comcast's current business model, and that the company is likely already exploring deals in the gaming industry.
Comcast could potentially partner with other gaming companies such as Take-Two Interactive and Nintendo, in addition to exploring outright acquisitions. The telecom giant may also consider long-term content deals, including commissioning exclusive games, similar to the partnership between Netflix and Ubisoft announced in September 2022. Despite potential suitors, Activision Blizzard's healthy financials and $3 billion breakup fee in the event of Microsoft's acquisition falling through ensure the company's stability. In fact, this figure is close to the company's record-breaking income of $3.16 billion in 2021.
Microsoft cannot close the Activision Blizzard deal yet as it could result in forfeiting its cloud gaming business in the UK. However, a successful appeal could lead to the British CMA reviewing the acquisition proposal once again later this year.
