Microsoft’s Activision Deal Worth $69B Receives Temporary Relief

Microsoft’s acquisition of Activision Blizzard, a video game company, has hit regulatory hurdles from US and UK authorities, resulting in an extension of the deadline for the $69 billion deal. The new deadline has been pushed to October 18, allowing more time for the companies to address the remaining regulatory issues. Brad Smith, president of Microsoft, expresses confidence in successfully closing the deal and states that they are committed to overcoming any obstacles. As part of the extension, the termination fee for canceling the deal has been increased to $3.5 billion, and additional agreements have been made. The original agreement allowed either party to terminate the merger if it wasn’t closed by Tuesday, which could have resulted in a $3 billion breakup fee for Microsoft unless both sides agreed to renegotiate.

According to an Activision Blizzard representative, the boards of directors for both companies have agreed not to terminate the deal until after October 18. This decision comes after global regulatory approvals and recognition from the UK’s Competition and Markets Authority (CMA) that there are remedies available to address their concerns. The companies remain confident in their next steps and anticipate a swift closure of the deal. Microsoft has spent the past week resolving legal challenges from antitrust enforcers in the US and UK who believe the merger would harm competition. The deal has received clearance in the US, especially after the Supreme Court declined to review an attempt to block the takeover by gamers who are fans of popular Activision titles.

The UK, however, still posed a challenge, but one that is likely to be overcome. The CMA initially rejected the deal but later delayed its final decision to consider new developments presented by Microsoft. On Monday, a judge conditionally approved a joint request from Microsoft and the British regulator to postpone proceedings, allowing for further negotiations. Daniel Beard, an attorney representing Microsoft in the UK case, expressed gratitude for the expedited process, emphasizing the urgency of closing the deal due to the UK being the only remaining obstacle.

One of the additional pieces of information requested by the judge was Microsoft’s announcement of a deal to address concerns from Sony, a top rival and maker of the PlayStation console. Microsoft has signed a deal with Sony to ensure that Call of Duty will remain on the PlayStation platform for at least 10 years. The US Federal Trade Commission (FTC) has not stated whether it will continue to challenge the merger after its previous attempts were denied by federal courts. Although the FTC has argued that the deal will harm competition, they may still proceed with a case scheduled for August, but this would not prevent the merger from occurring beforehand. (Read more Microsoft stories.)