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Microsoft’s $68bn Activision Blizzard Buyout Criticized by World Bank President

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Microsoft’s decision to acquire Activision Blizzard in a $68.7 billion all-cash deal has raised eyebrows. Many in the gaming industry have criticized the purchase over fears of Microsoft monopolizing. The president of the World Bank also has concerns over the acquisition, but for different reasons. David Malpass believes Microsoft could be spending its money better.

Speaking at the Peterson Institute for International Economics (from Reuters), Malpass says Microsoft is spending more money to buy Activision Blizzard than some smaller countries’ national net worth. He also points out the amount Microsoft is spending is significantly more than major nations have pledged to helping poor nations.

Malpass is talking about the World Bank International Development Association, which raises funds to help poor countries. Wealthy nations have pledged $23.5 billion towards those smaller countries over the next three years. Malpass says while this is a lot, Microsoft is spending much more to buy a company.

Strawman Argument?

It seems like a bit of a stretch on Malpass’ part. After-all, Microsoft is a private company and not a country, so the comparison doesn’t really make sense. However, he also argues much of the $68.7 billion Microsoft spends will end up on the bond market, which poor nations do not have access to.

“You have to wonder: ‘Wait a minute, is this the best allocation of capital?’” said Malpass. “This goes to the bond market. You know, a huge amount of (capital) flows are going to the bond market.”

“That gets you into a situation where a huge amount of the capital is being allocated to already capital-intensive parts of the world — the advanced economies — building more and more on top of already heavily built infrastructure and real estate, for example.”

Again, Microsoft is a private company and not a country. While the amount Microsoft is spending is obscene and any company/person having that kind of money or power when people having nothing in the world is problematic. However, it seems Malpass is picking an easy target in Microsoft when the whole system from top to bottom is the problem.

He does clarify how he thinks money can be better spent: “In order to address the refugee flow, that malnutrition that’s going on, and so on, there has to be more money and growth flowing into the developing countries.”

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Source Winbuzzer

Juliana Luwoye

The author Juliana Luwoye

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