Berkshire Hathaway chairman Warren Buffet has chimed in on the case of the Microsoft Activision deal.
Let’s get this out of the way first. Buffet was asked about this on Berkshire Hathaway’s financial call precisely because the company invested in Activision. Notably, they started investing $ 1 billion in shares in the company before the Microsoft deal was announced, and Buffet’s company had slowly increased their stake.
More recently, the company has started reducing that stake. Clearly, however, Buffet had a lot of faith in the deal, because the lowered stake as of February 2023, is still a hefty $ 4 billion, far more than what he started with.
We have provided an edited transcript for clarity below. To sum up, Warren still has confidence in Microsoft and Activision. He believe they have gone above and beyond what was needed to meet opposition to the deal, and he doesn’t seem to blame them for the rejections.
Rather, Buffet cites his company’s own failure to acquire the Questar Pipelines, owned by Dominion Energy. This deal goes beyond the scope of this website, but you can read about it here.
Anyway, Buffet points to the common issue between both deals; no matter how hard a company can work to meet regulator concerns, there is no way to guarantee these deals will go through.
The fact that there is still Berkshire Hathaway money in Activision seems to suggest Buffet still sees value in the game company. I dare say he could believe that the deal could still go through.
You can watch Buffet’s comments and/or read our edited transcript below.
“I would say this. I think Microsoft has been remarkably willing to cooperate with governing bodies and they want to do the deal and they met the opposition more than halfway but that doesn’t mean that it gets done.
If the UK wants to block it, if they they’re in a better position to block it than the United States, that’s just the way the world works. And that doesn’t get solved by offering more money or so.
I don’t know how it turns out, but if it doesn’t go through, I don’t think it’s through any shortcoming by either Microsoft or Activision. But, not everything that should happen does happen.
We ran into it when we bought when we made the deal with Dominion Energy 18 months ago. They let us buy a good bit of what we wanted to buy, and then the government, in effect, said, you can’t buy something else.
I think we would have done a better job with them than anybody else did. And with the states involved, they did not object to it, the customers didn’t object to it. But you don’t take on the United States government.
You try and figure out things that that you won’t have a problem with. I think in that case the US government made a mistake, I think the British government’s making a mistake in this case, but that’s life in the big cities.”
