• Hey, guest user. Hope you're enjoying NeoGAF! Have you considered registering for an account? Come join us and add your take to the daily discourse.

A newly created Microsoft subsidiary (‘Vault’) will be merged with and into ZeniMax.

driqe

driqe

Member
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.C_.2021.040.01.0021.01.ENG&toc=OJ:C:2021:040:TOC

Microsoft acquires within the meaning of Article 3(1)(b) of the Merger Regulation sole control of the whole of ZeniMax. The concentration is accomplished by way of a merger pursuant to which a newly created Microsoft subsidiary (‘Vault’) will be merged with and into ZeniMax.
Click to expand...
Observations must reach the Commission not later than 10 days following the date of this publication. The following reference should always be specified:
Click to expand...
Done deal in 10 days?

Dice developer said this on era

Microsoft is creating a new subsidiary called "Vault" that will be merged with and into Zenimax. News | ResetEra
Yea this is basically the same approach that we are taking with Codemasters. Where there will be a subsidiary established called Codex Games that would handle the integration.

No idea what the actual legal or management reasons for these things are, though.
Click to expand...
 
Last edited:
driqe

driqe

Member
whyman said:
So Microsoft gets a controlling stake in Zenimax? Didn't they do that when buying Bethesda?
Click to expand...
Question Mark What GIF by MOODMAN
 
thebigmanjosh

thebigmanjosh

Member
No idea what the actual legal or management reasons for these things are, though.
Click to expand...
This is the best way to quickly integrate, suck the life from, and discard the remains of Zenimax.

But seriously, this is common and called a reverse triangular merger, and it's done to preserve the acquired company, isolate liabilities, and keep existing assets/contracts intact (I.e. any exclusivity agreements or partnership contracts will be kept in-tact, where other types of mergers will immediately void existing agreements).
 
Last edited:
M

MonarchJT

Banned
whyman said:
So Microsoft gets a controlling stake in Zenimax? Didn't they do that when buying Bethesda?
Click to expand...
They completely own zenimax and all the studios.....is just a publishing arm like XGS is. It is always used in M&A to avoid in case of (previous) debts that only zenimax is responsible for it . But it also allows for the acquisition of further studios under Bethesda
 
Last edited:
Heisenberg007

Heisenberg007

Gold Journalism
So ... a Zen Vault?
seth meyers GIF by Late Night with Seth Meyers


Btw, it's just corporate structuring. By keeping it separately, MS is just simplifying how it would manage. Just like Marvel operates slightly independently, but still reports to Disney.
 
Last edited:
M

MonarchJT

Banned
thebigmanjosh said:
This is the best way quickly integrate, suck the life from, and discard the remains of Zenimax.

But seriously, this is common and called a reverse triangular merger, and it's done to preserve the acquired company, isolate liabilities, and keep existing assets/contracts intact (I.e. any exclusivity agreements or partnership contracts will be kept in-tact, where other types of mergers will immediately void existing agreements).
Click to expand...
you explained it better than i did
 
skit_data

skit_data

Member
Interesting choice of name... will Microsoft perform horrible experiments with questionable ethics in a controlled environment on the dev teams?
 
Last edited:
M1chl

M1chl

Currently Gif and Meme Champion
I don't fully understand, why they are (mainly the studios) are not below MS/Xbox itself, can someone chime in? Or is it some middle process before merging into MSFT? I don't watch these sort of business practices.
 
mejin

mejin

Member
M1chl said:
I don't fully understand, why they are (mainly the studios) are not below MS/Xbox itself, can someone chime in? Or is it some middle process before merging into MSFT? I don't watch these sort of business practices.
Click to expand...

Maybe they don't want Spencer to mess them up.
 
Zheph

Zheph

Member
M1chl said:
I don't fully understand, why they are (mainly the studios) are not below MS/Xbox itself, can someone chime in? Or is it some middle process before merging into MSFT? I don't watch these sort of business practices.
Click to expand...
They create a new entity so it doesn't change anything for all the deals (exclusivities, contractors, etc) Bethesda already had in place. It would have been quite different if you move directly under Xbox Studios and complicate a lot of things, making it a brutal merger that could have been costly. Many companies are doing it, it won't change the fact that MS owns it and call the shots.
 
Last edited:
M1chl

M1chl

Currently Gif and Meme Champion
Zheph said:
They create a new entity so it doesn't change anything for all the deals (exclusivities, contractors, etc) Bethesda already had in place. It would have been quite different if you move directly under Xbox Studios and complicate a lot of things, making it a brutal merger that could have been costly. Many companies are doing it, it won't change the fact that MS owns it and call the shots.
Click to expand...
Thank you, that explains it : )
 
Clear

Clear

CliffyB's Cock Holster
Its just a legal thing so they can take 100% ownership without legal complication to the merged business. Basically they create a subsidiary which acts as a shell, when the thing they are buying merges into the shell there's no conflict to resolve because its got no existing business of its own; what it does though is confer full legal ownership and control to its parent (MS).

Basically when two companies merge, one gets destroyed. This method preserves the both by using a freshly formed subsidiary to take the hit.
 
Last edited:
Interfectum

Interfectum

Member
M1chl said:
I don't fully understand, why they are (mainly the studios) are not below MS/Xbox itself, can someone chime in? Or is it some middle process before merging into MSFT? I don't watch these sort of business practices.
Click to expand...
It's basically another publishing arm for Xbox, like XGS is. This way of doing it is smart because there isn't so much pressure on XGS publishing to manage all of these studios... they are broken up at a higher level and maintain a ton of jobs in the process.
EiyMBaRX0AEeTr1
 
Last edited:
Trimesh

Trimesh

Banned
justiceiro said:
Sounds more like a github operation than a acquisition, tbh.
Click to expand...

It's standard business stuff - when you merge two companies one of them is designated as the successor and the other ceases to exist. By forming a throwaway wholly owned subsidiary company then merging that with Zenimax with Zenimax being the successor entity they don't interfere with any the contractual arrangements that Zenimax had.
 
ethomaz

ethomaz

Banned
People needs to understand.

MS has it own policies.
ZeniMax has it own policies.

If you brute force ZeniMax into MS making all the employees works with the new policies then you create a big issue that can even generate employee contractual process.

So you create a new company that merge with the actual ZeniMax maintain most of the ZeniMax's policies and start little by little to change these policies to match MS policies... so when that new company is an state that the merge with the big MS will be transparent they do the final merger.

That is what happens in a lot of big companies that buy small companies... you avoid bureaucracy, employee law process, and the shock of a brute chance.

That is normal.
That process can take months or years... depends of how well the new company receive the changes.
In any case the new company is in full control from MS... so it doesn't means anything for us gamers... it is more an administrative process.
 
Last edited:
ethomaz

ethomaz

Banned
AJUMP23 said:
Where do you lock away all the games from Sony, the "VAULT". :messenger_grinning_smiling:
Click to expand...
Actually the "Vault" allow them to maintain the actual contracts with Sony if they had any.
And allow MS to study each contract case to see if there is a way to change or even break it.
 
Last edited:
yurinka

yurinka

Member
whyman said:
So Microsoft gets a controlling stake in Zenimax? Didn't they do that when buying Bethesda?
Click to expand...
Microsoft bought Zenimax (which includes Bethesda and others) for $7.5B. They bought the company, not a controlling stake.

And as part of this deal MS created a nw subsidiary called Vault and integrated on Zenimax, which I assume will be a MS team in charge of integrating Zenimax into MS.
 
Interfectum

Interfectum

Member
ethomaz said:
People needs to understand.

MS has it own policies.
ZeniMax has it own policies.

If you brute force ZeniMax into MS making all the employees works with the new policies then you create a big issue that can even generate employee contractual process.

So you create a new company that merge with the actual ZeniMax maintain most of the ZeniMax's policies and start little by little to change these policies to match MS policies... so when that new company is an state that the merge with the big MS will be transparent they do the final merger.

That is what happens in a lot of big companies that buy small companies... you avoid bureaucracy, employee law process, and the shock of a brute chance.

That is normal.
That process can take months or years... depends of how well the new company receive the changes.
In any case the new company is in full control from MS... so it doesn't means anything for us gamers... it is more an administrative process.
Click to expand...
People will not understand but this is a good explanation.
 
ethomaz

ethomaz

Banned
Interfectum said:
People will not understand but this is a good explanation.
Click to expand...
In the past I watched the merge of small company with IBM in Brasil where I worked... for coincidence a friend was working in that small company and we started to work together after the merge finalized.

So I know his case... he has different beneficies in the old company than IBM offer to their employees... so in Brasilian's laws the employee should maintain all these beneficies unless it is make a another working contract.
IBM created another company merged with the small company and start to deal with each employee to reach a middle term with them... they talked and reached a deal with each one of them in private before merger with IBM.
That process took months.
In my friend case the medical plan (different from IBM employees) has maintained because it was what he cared... the others beneficies were changed to match the IBM... a new working contract was signed and so he and IBM were happy.

If you try to brute force and change the beneficies the employee could get made and go to court for his rights... that could generate several extra costs for IBM.

It just a example.
That happens a lot of times in acquisitions and in most case you don't even know about that.
I'm surprise they are talking about MS doing it lol
 
Last edited:
Trimesh

Trimesh

Banned
You're making this way too complicated.

The entire purpose of this whole thing is to effectively turn Zenimax into a Microsoft subsidiary - but in a way that won't trigger any of the "change of control" terms in their existing contracts.

This "Vault" entity is essentially irrelevant, since once the reverse merger is complete it will cease to exist.
 
B

Bladed Thesis

Member
thebigmanjosh said:
This is the best way quickly integrate, suck the life from, and discard the remains of Zenimax.

But seriously, this is common and called a reverse triangular merger, and it's done to preserve the acquired company, isolate liabilities, and keep existing assets/contracts intact (I.e. any exclusivity agreements or partnership contracts will be kept in-tact, where other types of mergers will immediately void existing agreements).
Click to expand...
Exactly this.
 
You must log in or register to reply here.

Similar threads

Microsoft plans to merge Zenimax into a subsidiary called "Vault" future for PS5 releases uncertain.
5
1K
Starfield replied
  • Locked
[Corporatism]: Pfizer "acquired" for $160B, now free from the need to pay taxes
2 3 4
167
21K
Phat Michael replied
  • Locked
Let's clear up the reason for Squaresoft's "demise" and why Square and Enix merged
5 6 7 8 9
413
199K
DJIzana replied
Top Bottom