5 biggest deals of 2022: Musk's Twitter buyout, Microsoft-Activision

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As we head into 2023, here's a look back at a year that saw dealmaking slow into year-end amid rising interest rates by central banks, with three of the top five deals fraught with regulatory hurdles and controversy. Here are the five biggest merger deals of the year, as covered first on AiVIFPro+.

1. Microsoft-Activision Buyout

The year's biggest deal is a knotty one: Microsoft (NASDAQ:MSFT) in January agreed to buy video game publisher Activision Blizzard (NASDAQ:ATVI) for $68.7 billion in cash, or $95 per share, sending Activision shares soaring from their prior level around $65.

But earlier this month the U.S. Federal Trade Commission sued to block the deal, arguing that it would "harm competition in multiple dynamic and fast-growing gaming markets" and allow Microsoft to "suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.”

A private consumer lawsuit was filed against Microsoft later in December, as well, also on anticompetitive grounds. The first pre-trial hearing for the FTC case is set for Jan. 3.

The deal, if not ultimately blocked, would provide Microsoft with a vast library of popular video-game franchises and make it the world’s third-largest gaming company by revenue, behind Tencent (OTC:TCEHY) and Sony (NYSE:SONY).

Activision shares still ended the year up 13.5%. Microsoft lost 28.4%.

2. Broadcom-VMware Buyout

The second-biggest deal of 2022, Broadcom's (NASDAQ:AVGO) May pact to buy VMware (NYSE:VMW) for some $61 billion in cash and stock, is also facing regulatory scrutiny.

The European Commission this month opened an "in-depth investigation" into the proposed merger, saying it is "particularly concerned that the transaction would allow Broadcom to restrict competition in the market for certain hardware components which interoperate with VMware's software." The EC has until May 11, 2023 to reach a decision.

Britain's competition regulator, the Competition and Markets Authority, also said in November that it was launching a probe into the deal.

Wall Street was positive on the potential deal, with Morgan Stanley (NYSE:MS) in particular saying, "If VMware is acquired, we see cost reduction and improving operating efficiency as a potential outcome.”

VMware added 3.9% for the year. Broadcom slid 15.7%.

3. Musk-Twitter Buyout

Coming in at number three was billionaire Elon Musk's $44 billion purchase of Twitter at $54.20 per share. The agreement, inked in April, was completed only in late October after a protracted legal battle prompted by Musk's attempt to abandon the deal.

Musk's chaotic reign since October was characterized by Wedbush as a "nightmare" for Tesla (NASDAQ:TSLA) shareholders. Among other things, Musk unloaded billions of dollars in Tesla stock, which he told Twitter employees he did in order to "save Twitter," CNBC reported. Shares of the Musk-led Tesla have lost an astounding 69.2% for 2022.

Musk last week said he would step down as Twitter CEO once he finds a replacement. Wedbush said this should occur by the end of January in order for Tesla to recover in the new year.

4. Hamm Family-Continental Resources Buyout

Next on the list is Continental Resources (NYSE:CLR) founder Harold Hamm's October agreement to take the company private: $74.28 a share for the stock not already owned by him or his family trust, putting Continental at a valuation of some $27 billion.

The final numbers were a sweetened version of the deal Hamm first offered in June, when he proposed $70 per share, at which point the stock had been trading at around $64. The deal closed in November.

5. Amgen-Horizon Therapeutics Buyout

Rounding out the biggest deals was Amgen's (NASDAQ:AMGN) December deal to snap up Horizon Therapeutics (NASDAQ:HZNP) for $116.50 per share, or $26 billion - a roughly 20% premium to Horizon's $97.29 closing price in the session before the announcement. If completed, Horizon would become Amgen’s largest-ever acquisition.

Amgen said it expects to complete the deal in the first half of 2023. Amgen CEO Robert Bradway said the buyout is a move that is "consistent with our strategy of delivering long-term growth by providing innovative medicines that address the needs of patients who suffer from serious diseases."

Horizon shares jumped more than 15% on the news and were up 5.4% for the year. Amgen slipped marginally on the announcement but gained 15.9% for 2022.

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