Activision Blizzard soars 38% after Microsoft reportedly agrees to acquire the video-game maker for $69 billion in cash

• Microsoft has reportedly agreed to acquire Activision Blizzard for $69 billion in all cash.
• The deal comes as Activision is roiled by workplace sexual harassment allegations.
• The reported merger would catapult Microsoft further into the video-game world.
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Microsoft has reportedly agreed to acquire Activision Blizzard for $69 billion in an all-cash transaction, according to reporting from The Wall Street Journal and CNBC.

Shares of Activision soared as much as 38% to about $90 per share, just below the expected acquisition price of about $95 per share. Meanwhile, shares of Microsoft fell about 1% in pre-market trading.

The potential acquisition would catapult Microsoft further into the video gaming world, flanked by its Xbox console and its prior acquisitions of Minecraft and Bethesda. The deal would also be a lifeline to Activision, which has seen its stock price fall 40% amid workplace sexual harassment allegations and lawsuits.

The offer reportedly has a high break-up fee of about $3 billion, signalling Microsoft's confidence that it will be able to complete the takeover without much scrutiny from regulators.

Loup Ventures' Gene Munster thinks the deal is "setting up for good drama" between the world's second most valuable company and Washington, DC.

"I think the deal ultimately gets done," Munster told CNBC, adding that saber-rattling from regulators, doesn't change the fact that the merger could lead to many benefits for the consumer.

The deal will give Microsoft more exposure to a subscription revenue business, more exposure to the consumer, and help the software giant increase its exposure to the still nascent metaverse, Munster said.