Twitter, Microsoft-Activision’s takeover of Investing.com
By the dawn of 2023, you could see year-end deals slow amid central bank interest rate hikes and three of the top five deals closed, facing regulatory hurdles and disputes. Here are the five biggest mergers of the year, as covered by InvestingPro+.
1. Acquisition of Activision by Microsoft
The biggest deal of the year is a tough one: In January, Microsoft (NASDAQ: ) agreed to buy video game publisher Activision Blizzard (NASDAQ: ) for $68.7 billion in cash, or $95 per share, sending Activision shares up from their previous close. about $65.
But earlier this month, the US Federal Trade Commission filed a lawsuit to block the deal, saying it would “harm competition in many dynamic and growing gaming markets and allow Microsoft to eliminate competitors from its Xbox game consoles and growing subscription content cloud gaming business.”
In late December, an individual consumer lawsuit was also filed against Microsoft on anti-competitive grounds. The first preliminary hearing in the FTC case is scheduled for January.
The deal, if not ultimately blocked, would provide Microsoft with a vast library of popular video game franchises, making it the world’s third-largest game company behind Tencent ( OTC: ) and revenue. sony (NYSE:).
Activision shares still ended the year up 13.5%. Microsoft lost 28.4%.
2. VMware takeover by Broadcom
The second-biggest deal of 2022, Broadcom’s (NASDAQ: ) takeover of VMware (NYSE: ) for $61 billion in cash and stock, is also under regulatory scrutiny.
The European Commission opened a “comprehensive investigation” into the proposed merger this month, saying it was “particularly concerned that the deal would allow Broadcom to limit competition in the market for certain hardware components that interact with VMware software.” The EC must make a decision by May 11, 2023.
England’s competition regulator, the Competition and Markets Authority, also said in November it was considering launching an investigation.
Wall Street reacted positively to the potential deal, Morgan Stanley (NYSE:) saying, “If VMware is acquired, we see cost reductions and improved operational efficiencies as potential outcomes.”
VMware gained 3.9% for the year. Broadcom fell 15.7%.
3. Takeover of Twitter (NYSE: ) by Elon Musk
Billionaire Elon Musk, who bought Twitter for $44 billion and $54.20, took the third place. The deal, signed in April, was finalized only after a lengthy legal battle that began in late October with Musk’s attempt to void the deal.
Musk’s chaotic reign since October has been called a “nightmare” for Tesla shareholders by Wedbush (NASDAQ: CNBC reports that, among other things, Musk spent billions of dollars on Tesla stock to save Twitter. Shares of Musk-led Tesla have lost a staggering 69.2% in 2022.
Last week, Musk said he would step down as soon as Twitter found a replacement as CEO. Wedbush said that should happen by the end of January, which would allow Tesla to recover in the new year.
4. Acquisition of Continental (ETR:) Resources by the Hamm family
Next on the list is Continental Resources (NYSE: ), founded by the Hamm family, at $74.28 per share in October for shares not owned by him or his family, valuing Continental at about $27 billion.
The final numbers were a lowered version of the $70 a share offer that was first offered in June, when the stock was trading at around $64. The deal was completed in November.
5. Acquisition of Horizon Therapeutics by Amgen
The acquisition of Horizon Therapeutics (NASDAQ: ) by Amgen (NASDAQ: ) for $116.50 per share, or $26 billion, represents a premium of about 20% to Horizon’s closing price of $97.29 the day before the announcement. If the deal closes, Horizon would be Amgen’s largest acquisition to date.
Amgen said it expects to complete the transaction in the first half of 2023. Amgen CEO Robert Bradway said the acquisition “is consistent with our long-term growth strategy by delivering innovative medicines that meet the needs of patients with serious diseases.”
Horizon shares rose more than 15% on the news and are up 5.4% for the year. Amgen fell slightly after the announcement, but gained 15.9% in 2022.
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