Microsoft and Activision Blizzard postpone the deadline of their acquisition deal by three months. The two companies announced this on Wednesday. The acquisition would be completed by July 18, but the two companies are still in negotiations with competition regulators.
Microsoft and Activision Blizzard have postponed the acquisition deadline to October 18, 2023, writes Activision Blizzard when announcing its quarterly figures. This means that both parties still have three months to complete the takeover. The two companies are currently in discussions with the UK Competition and Markets Authority. The competition authority blocked the takeover in April, but is now considering a new takeover proposal from Microsoft. The CMA will make its new ruling by August 28 at the latest.
The Microsoft and Activision acquisition deal had a termination date of July 18. If the takeover had not been completed after that date, both parties were allowed to cancel the takeover. In that case, Microsoft had to pay Activision $3 billion. That deadline expired yesterday, but the two companies have postponed it. This way, Microsoft and Activision can wait for the CMA’s ruling.
Microsoft and Activision Blizzard have extended the merger agreement deadline to 10/18. We’re optimistic about getting this done, and excited about bringing more games to more players everywhere.
The extension does make some minor adjustments to the deal. If the acquisition is terminated after August 29, Microsoft will have to pay Activision $3.5 billion instead of the current $3 billion. If the takeover is stopped after September 15, that amount will increase to $4.5 billion. The new agreement also includes changes to the ‘Xbox commercial agreements’ that Activision Blizzard has with Microsoft. This should yield Activision up to 250 million dollars in the financial years 2023 and 2024. What exactly these changes entail is not disclosed.
The Activision takeover by Microsoft was under pressure for a long time, but it is becoming increasingly likely that the deal can go through. The US Federal Trade Commission tried to stop the takeover through a preliminary injunction while its own investigation was still ongoing, but lost a court case. The FTC has appealed that ruling, although Microsoft may complete the acquisition before a ruling has been rendered in that appeal case.
Only a few minutes after the ruling in the FTC lawsuit was announced, it became clear that the British CMA is also reconsidering its blockade. The CMA blocked the acquisition as it could potentially hinder competition in the cloud gaming market. Microsoft is said to have offered to ‘restructure’ the takeover to address the CMA’s concerns. It is not known exactly what that entails. The company is considering selling its cloud gaming rights within the UK, according to Bloomberg sources, but that has not yet been officially confirmed.
An overview of all Xbox game studios, including Activision Blizzard. Source: @Klobrille