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3 pages/≈825 words
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5
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APA
Subject:
Accounting, Finance, SPSS
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Essay
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English (U.S.)
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Topic:
Analyze of XYZ
Essay Instructions:
For your final essay, you will be applying the concepts learned throughout this course to an analysis of a merger or an acquisition. Much of the information you will need to complete this analysis can be found in the company's annual report. You may choose any recent merger or acquisition (within the last 5 years). Using the concepts from this course, you will analyze the success of the merger or acquisition.
The completed project should include the information listed below.
Provide an introduction to the companies involved in the merger or acquisition. Include the companies’ background information and the reasons for the merger.
Evaluate the financial statements of both companies (balance sheet, income statement, cash flow statement).
Evaluate the potential and actual risks that occurred during the merger and what the companies could have done differently to mitigate these risks.
Discuss the companies’ management of human capital in the merger or acquisition.
Evaluate the soundness of the company’s financial policies after the merger (e.g., capital structure, debt, leverage, dividend policy, enterprise risk management, and others.) based on the material covered during class.
Include a synopsis of your findings, including your recommendations and rationale for whether the merger or acquisition was beneficial to both companies and your recommendation on best practices for moving forward.
This analysis should be at least three pages in length, not counting the title and reference pages. Support your findings and recommendations with evidence from the annual report and at least five scholarly sources, such as the textbook, industry reports. Use APA format to cite and reference all sources, including any websites that were used to access company information.
Essay Sample Content Preview:
Analysis Of Microsoft and Activision Blizzard Merger
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Analysis Of Microsoft and Activision Blizzard Merger
The acquisition of Activision Blizzard by Microsoft, introduced in January 2022, marked a crucial event in the tech and gaming industries. Microsoft, an international technology corporation prominent for its software products and services, such as the Xbox gaming console, decided to purchase Activision Blizzard, one of the world's largest and most successful video game companies, for about $68.7 billion. This project examines the success of this acquisition, analyzing the background information, financial statements, human capital, and risks involved and providing recommendations and rationale for whether the merger was beneficial to both parties.
Background Information
The first company in the acquisition was Microsoft, founded by Bill Gates and Paul Allen in 1975, with the aim of developing and selling basic interpreters for the Altair 8800 (Claxton, 2023). The company has evolved to be a multinational organization, leading tech, providing a wide range of products and services, such as hardware, software, cloud computing, and gaming services. Having iconic products, including Azure, Windows, and Office, Microsoft has developed itself as a dominant force in the modern tech industry, giving the company an upper hand in engaging in acquisitions.
The second party was Activision Blizzard, established in 2008 through the merger of Activision, “one of the largest console video game publishers, and Blizzard, one of the largest PC video game publishers” (PitchBook, 2024). Until its acquisition by Microsoft, the company has had a legacy of being the world's major video game publisher, with its franchises, including the World of Warcraft, which supports above $8 billion in lifetime sales, and Call of Duty, which has sold over 175 million copies in almost 14 titles over 12 years.
Reasons for the Merger
Microsoft's acquisition of Activision Blizzard in January 2022 was driven by a number of strategic objectives. For instance, reports show that the major reason for Microsoft to acquire Blizzard was due to market prospects, specifically led by the COVID-19 pandemic (Hu & Wu, 2023). The restrictions and isolations for individuals pushed the gaming market, resulting in higher demand for online software games. Data shows that by 2020, the gaming market was valued at 155.55 billion dollars, but it was projected to reach 279.73 billion dollars by 2027, an approximated increase of 9.15% (Hu & Wu, 2023). Therefore, through such an acquisition, Microsoft aimed to improve its gaming portfolio with a varied range of popular franchises, gaining access to vast intellectual property and solidifying its position in the highly competitive gaming market.
Moreover, cross-team collaboration was also another reason for the acquisition. These two companies come from diverse settings or fields to combine information and share meaningful, exclusive views. Even though they come from different fields, these two have somethi...
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