In this article, we discuss the 5 biggest acquisitions of all time made by Microsoft. If you want to read our detailed analysis of these stocks, go directly to Microsoft’s 10 Biggest Acquisitions of All Time.
5. ZeniMax Media
Date of Purchase: September 2020
Amount Paid By Microsoft: $7.5 billion
The ZeniMax Media acquisition by Microsoft Corporation (NASDAQ:MSFT) was another step by the tech giant to increase presence in the gaming industry. ZeniMax Media was the parent company of Bethesda Softworks, a firm that owned eight game studios with several best-selling offerings, including The Elder Scrolls and Fallout. When making the announcement for the deal, Microsoft Corporation (NASDAQ:MSFT) underlined that gaming was the fastest-growing entertainment form and would generate annual revenues of $200 billion in the coming years.
Microsoft Corporation (NASDAQ:MSFT) touted the success of Xbox Game Pass when announcing the purchase, noting that the cloud-gaming service had reached 15 million subscribers. The ZeniMax Media purchase would help add up to 23 creative studios to the Microsoft Corporation (NASDAQ:MSFT) team for cloud gaming services that would contribute to the sustained success of gaming strategy of the tech giant, the press release outlined. Satya Nadella, the CEO Microsoft Corporation (NASDAQ:MSFT), was at the forefront of this deal too.
4. Skype Technologies
Date of Purchase: May 2011
Amount Paid By Microsoft: $8.5 billion
Skype Technologies is still one of the most recognizable brands across the world, especially with regards to wireless social connections. The pandemic has served to highlight the importance of companies like Skype to the overall functioning of business. It is hard to believe that Microsoft Corporation (NASDAQ:MSFT) bought Skype for just $8.5 billion more than a decade ago. The deal was worth 32 times the operating profits of Skype and the largest Microsoft Corporation (NASDAQ:MSFT) acquisition at the time.
Skype Technologies started out as a business in 2003 and was bought by eBay in 2005 for $3.1 billion. eBay sold a majority stake in Skype to a private investment firm in 2009 for more than $1 billion less than the purchase price. The purchase was also a little confusing since Microsoft Corporation (NASDAQ:MSFT) already had software that offered much of what Skype did, which included live chats, video conferencing, and a large user base. However, in the years since, Microsoft Corporation (NASDAQ:MSFT) has phased those software out for Skype.
3. Nuance Communications
Date of Purchase: April 2021
Amount Paid By Microsoft: $19.7 billion
Nuance Communications is one of the more recent acquisitions of Microsoft Corporation (NASDAQ:MSFT). The deal represented the second-largest purchase ever by Microsoft Corporation (NASDAQ:MSFT) at the time and reflected a strategy of the firm to look for growth through these purchases. Before buying Nuance, Microsoft Corporation (NASDAQ:MSFT) had pursued deals to buy chat app Discord and social media app TikTok. Nuance Communications markets tools for speech recognition, a high-growth market segment.
On the day the deal was announced, the share of Nuance Communications climbed by around 16%. Microsoft Corporation (NASDAQ:MSFT) shares also registered a small rally. In a press release announcing the deal, Microsoft Corporation (NASDAQ:MSFT) noted that the purchase would help improve the cloud products of the tech giant in the healthcare sector. Microsoft Corporation (NASDAQ:MSFT) CEO Satya Nadella, commenting on the deal, said “digital tech” was the “key” in the provider market of the future.
2. LinkedIn
Date of Purchase: December 2016
Amount Paid By Microsoft: $26.2 billion
Microsoft Corporation (NASDAQ:MSFT) purchased LinkedIn in an all-cash transaction in 2016. LinkedIn was the largest professional network in the world when the deal was made and continues to be so, although the growth of users on the platform has slowed in recent years amid a broader lull around social media offerings as the “metaverse” comes into play. When the deal was made, LinkedIn had nearly 433 millions members, 105 million unique visiting members per month, and 45 billion quarterly member page views.
Microsoft Corporation (NASDAQ:MSFT) aimed to use the social services that LinkedIn offered to enhance the usage of products like Microsoft Office 365 and Dynamics. Satya Nadella, the CEO of Microsoft Corporation (NASDAQ:MSFT), said the purchase, the biggest for Microsoft Corporation (NASDAQ:MSFT) at the time, would give Microsoft Corporation (NASDAQ:MSFT) the chance to “change the way the world works”. The deal was announced in June 2016 and closed in December.
1. Activision Blizzard
Date of Purchase: January 2022
Amount Paid By Microsoft: $68.7 billion
Activision Blizzard is the most recent and the biggest purchase of Microsoft Corporation (NASDAQ:MSFT). The tech giant bought the development firm, famous for blockbuster game offerings, in an all-cash transaction. The deal was the latest in a series of purchases in the gaming space by Microsoft Corporation (NASDAQ:MSFT). After the deal closes, Microsoft Corporation (NASDAQ:MSFT) will become the third largest gaming company in the world in terms of revenue, behind only titans like Sony and Tencent. Activision Blizzard owns popular games like Warcraft, Diablo, Overwatch, Call of Duty and Candy Crush.
As part of the deal, Activision Blizzard maintains independence of operations but will report to Phil Spencer, the CEO of the gaming department at Microsoft Corporation (NASDAQ:MSFT). Bobby Kotick, the CEO of Activision Blizzard, said at the time of the announcement of the deal that the combination of the “world-class talent” of the gaming firm with the tech and resources of Microsoft Corporation (NASDAQ:MSFT) would help Activision with “continued success” in an increasingly “competitive industry”.
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