Moody's Affirms Microsoft's 'Aaa' Rating on Plan to Buy Activision Blizzard

Posted 19 January, 2022

The international rating agency Moody confirmed the credit rating of Microsoft Corp. at 'Aaa' with a stable outlook after the company agreed to acquire video game maker Activision Blizzard, the agency said.

The rating of the company's commercial papers was also affirmed - at the level of "P-1".

On the eve of the company announced plans to acquire one of the largest producers of video games Activision Blizzard for 68.7 billion dollars. The purchase is expected in the first half of next year, subject to customary completion of regulatory review and shareholder approval by Activision Blizzard.

"The acquisition of Activision makes good strategic sense and will support Microsoft's strategy to expand its market position through investments in cloud services," the agency explains.

The stable rating outlook reflects the agency's view that the company will continue to maintain and defend its very strong market position and expand its cloud offerings.

Moody also forecasts that Microsoft will deliver consistently strong profitability with EBITDA margins of over 50% and free cash flow generation after paying dividends of more than $50 billion this June and $60 billion next June.

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