v3.22.2.2
BUSINESS COMBINATIONS
 3 Months Ended
Sep. 30, 2022
Business Combinations [Abstract]  
BUSINESS COMBINATIONS

NOTE 7 — BUSINESS COMBINATIONS

Nuance Communications, Inc.

On March 4, 2022, we completed our acquisition of Nuance Communications, Inc. (“Nuance”) for a total purchase price of $18.8 billion, consisting primarily of cash. Nuance is a cloud and artificial intelligence (“AI”) software provider with healthcare and enterprise AI experience, and the acquisition will build on our industry-specific cloud offerings. The financial results of Nuance have been included in our consolidated financial statements since the date of the acquisition. Nuance is reported as part of our Intelligent Cloud segment.

The purchase price allocation as of the date of acquisition was based on a preliminary valuation and is subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available.

The major classes of assets and liabilities to which we have preliminarily allocated the purchase price were as follows:

 

(In millions) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill (a)

 

 

$ 

16,329

 

Intangible assets

 

 

 

4,365

 

Other assets

 

 

 

42

 

Other liabilities (b)

 

 

 

(1,973

)

 

 

 

 

 

 

 

 

 

 

 

 

Total 

 

 

$

18,763

 

 

 

 

 

 

 

 

 

 

 

(a)

Goodwill was assigned to our Intelligent Cloud segment and was primarily attributed to increased synergies that are expected to be achieved from the integration of Nuance. None of the goodwill is expected to be deductible for income tax purposes.

(b)

Includes $986 million of convertible senior notes issued by Nuance in 2015 and 2017, of which $985 million was redeemed as of September 30, 2022.

 

Following are the details of the purchase price allocated to the intangible assets acquired:

 

(In millions, except average life)

 

Amount

 

 

Weighted

Average Life

 

 

 

 

 

 

 

Customer-related

 

$

2,610

 

 

9 years

 

Technology-based

 

 

1,540

 

 

5 years

 

Marketing-related

 

 

215

 

 

4 years

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

4,365

 

 

7 years

 

 

 

 

 

 

 

 

 

 

 

Activision Blizzard, Inc.

On January 18, 2022, we entered into a definitive agreement to acquire Activision Blizzard, Inc. (“Activision Blizzard”) for $95.00 per share in an all-cash transaction valued at $68.7 billion, inclusive of Activision Blizzard’s net cash. Activision Blizzard is a leader in game development and an interactive entertainment content publisher. The acquisition will accelerate the growth in our gaming business across mobile, PC, console, and cloud and will provide building blocks for the metaverse. The acquisition has been approved by Activision Blizzard’s shareholders, and we expect it to close in fiscal year 2023, subject to the satisfaction of certain regulatory approvals and other customary closing conditions.