Berkshire Hathaway ( (BRK.A) – Get Berkshire Hathaway Inc. Class A Report) CEO Warren Buffett revealed the conglomerate owns a 9.5% stake of Activision Blizzard ( (ATVI) – Get Activision Blizzard, Inc. Report) from its initial stake of 2%, the gaming company, that is set to be acquired by Microsoft ( (MSFT) – Get Microsoft Corporation Report).
“If the deal goes through, we make some money,” he said at the company’s annual shareholder meeting.
Buffett said the purchase of additional shares was his decision.
A majority of Activision Blizzard shareholders voted in April to give a thumbs up for the $69 billion all cash deal that was announced in January. This would be the largest tech merger and would give Microsoft control over Activision’s video games such as Call of Duty, Candy Crush and World of Warcraft.
The deal is expected to close during the summer and faces scrutiny from several government entities, such as the U.S. Federal Trade Commission.
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Buffett said he does not know what the European Commission, the U.S. Justice Department or other market regulators will do.
If the deal falls apart, Berkshire can “absolutely” lose “large sums of money,” he said.
He has said the investment of Activision was “no bonanza” for Berkshire since it paid $77 a share in October and November 2021 and was not aware that Microsoft would takeover the gaming company. Microsoft’s bid for Activision is $95 per share.
The company said on April 15 in a regulatory filing that it received a “voluntary request for information from the SEC and a grand jury subpoena from the DoJ, both of which appear to relate to their respective investigations into trading by third parties – including persons known to Activision Blizzard’s CEO – in securities prior to the announcement of the proposed transaction.”
Shares of Activision dipped to $75.50 a share after the company’s first quarter earnings showed a lower demand. The company reported net income dipped to $395 million or 50 cents per share from $619 million or 79 cents per share from a year ago.
Activision has faced massive problems after female employees made sexual harassment and misconduct accusation of several executives, causing shares to decline.
