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BUSINESS COMBINATIONS | 12 Months Ended
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Jun. 30, 2021
Business Combinations [Abstract] |
BUSINESS COMBINATIONS | NOTE 8 — BUSINESS COMBINATIONS ZeniMax Media Inc. On March 9, 2021, we completed our acquisition of ZeniMax Media Inc. (“ZeniMax”), the parent company of Bethesda Softworks LLC (“Bethesda”), for a total purchase price of $8.1 billion, consisting primarily of cash. The purchase price included $768 million of cash and cash equivalents acquired. Bethesda is one of the largest, privately held game developers and publishers in the world, and brings a broad portfolio of games, technology, and talent to Xbox. The financial results of ZeniMax have been included in our consolidated financial statements since the date of the acquisition. ZeniMax is reported as part of our More Personal Computing 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) |
Cash and cash equivalents |  | $ | 768 |
Goodwill |  |  | 5,469 |
Intangible assets |  |  | 1,968 |
Other assets |  |  | 139 |
Other liabilities |  |  | (223 | )
Total |  | $ | 8,121 |
Goodwill was assigned to our More Personal Computing segment. The goodwill was primarily attributed to increased synergies that are expected to be achieved from the integration of ZeniMax. None of the goodwill is expected to be deductible for income tax purposes. Following are details of the purchase price allocated to the intangible assets acquired:
(In millions) |  | Amount |  |  | Weighted Average Life |
Technology-based |  | $ | 1,341 |  |  |  | 4 years |
Marketing-related |  |  | 627 |  |  |  | 11 years |
Total |  | $ | 1,968 |  |  |  | 6 years |
GitHub, Inc. On October 25, 2018, we acquired GitHub, Inc. (“GitHub”), a software development platform, in a $7.5 billion stock transaction (inclusive of total cash payments of $1.3 billion in respect of vested GitHub equity awards and an indemnity escrow). The acquisition is expected to empower developers to achieve more at every stage of the development lifecycle, accelerate enterprise use of GitHub, and bring Microsoft’s developer tools and services to new audiences. The financial results of GitHub have been included in our consolidated financial statements since the date of the acquisition. GitHub is reported as part of our Intelligent Cloud segment. The allocation of the purchase price to goodwill was completed as of June 30, 2019. The major classes of assets and liabilities to which we allocated the purchase price were as follows:
(In millions) |
Cash, cash equivalents, and short-term investments |  | $ | 234 |
Goodwill |  |  | 5,497 |
Intangible assets |  |  | 1,267 |
Other assets |  |  | 143 |
Other liabilities |  |  | (217 | )
Total |  | $ | 6,924 |
The goodwill recognized in connection with the acquisition is primarily attributable to anticipated synergies from future growth and is not expected to be deductible for tax purposes. We assigned the goodwill to our Intelligent Cloud segment. Following are the details of the purchase price allocated to the intangible assets acquired:
(In millions) |  | Amount |  |  | Weighted Average Life |
Customer-related |  | $ | 648 |  |  |  | 8 years |
Technology-based |  |  | 447 |  |  |  | 5 years |
Marketing-related |  |  | 170 |  |  |  | 10 years |
Contract-based |  |  | 2 |  |  |  | 2 years |
Total |  | $ | 1,267 |  |  |  | 7 years |
Transactions recognized separately from the purchase price allocation were approximately $600 million, primarily related to equity awards recognized as expense over the related service period. Nuance Communications, Inc. On April 11, 2021, we entered into a definitive agreement to acquire Nuance Communications, Inc. (“Nuance”) for $56.00 per share in an all-cash transaction valued at $19.7 billion, inclusive of Nuance’s net debt. 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 acquisition has been approved by Nuance’s shareholders, and we expect it to close by the end of calendar year 2021, subject to the satisfaction of certain regulatory approvals and other customary closing conditions.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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