Markets are doubtful that regulators will approve Microsoft’s (MSFT) buyout of Activision (ATVI). Europe is scrutinizing the deal while Sony (SONY) questions the monopolistic power of Microsoft’s Xbox franchise owning Activision.
Microsoft offered $95, or $69 billion, to buy Activision. Activision wins either way: if the deal falls apart, it gets a $2.27 billion termination fee. Conversely, Microsoft shareholders are better off with Microsoft not buying Activision. The software giant proposed the deal when the stock market traded at lofty levels.
The bear market of 2022 shows no sign of easing. Investors are avoiding the technology as the economic recession of 2023 plays out.
Amazon’s (AMZN) proposal to buy iRobot (IRBT) is also under regulatory review. Amazon proposed to buy iRobot in an all-cash deal for $1.7 billion in August 2022. iRobot is trading at around $1.45 billion. The stock fell from $60 after the deal announcement to around $52.
A non-profit watchdog is demanding that the U.K. review Amazon’s iRobot buyout. It claims the acquisition will give Amazon an unfair edge in the smart home industry. IRBT stock is trading close to the buyout price. The market has confidence that the deal will go through.
IRBT stock is a good bet from here. ATVI stock is trading lower as its chances of the deal going through weaken.
