Microsoft and Activision Extend Merger Deadline to October 18

Microsoft and Activision have jointly agreed to extend the deadline for their massive merger by three months. The original deadline was July 18, but the companies say they need more time to address regulatory concerns.

The Details of the Extension

In a joint press release, Microsoft and Activision announced that they have extended the merger agreement deadline from July 18, 2023, to October 18, 2023. This extension is intended to give them additional time to resolve remaining regulatory concerns.

The companies also set out two earlier deadlines in their agreement:

  • August 29: If the deal doesn’t close by this date, Microsoft will pay a termination fee of $3.5 billion.
  • September 15: If the deal still hasn’t closed by this date, Microsoft’s termination fee will increase to $4.5 billion.

A Complex Regulatory Landscape

The merger has been complicated by regulatory opposition in the US and UK. In April, the UK’s Competition and Markets Authority (CMA) blocked the acquisition, citing concerns that it would substantially weaken competition in the cloud gaming market. The US Federal Trade Commission is also opposed to the merger and has sued to block it.

However, earlier this month, a federal court judge dismissed the FTC’s arguments that the deal would be anti-competitive. The European Union’s competition commission greenlit the acquisition in May, so the UK decision is the only major obstacle standing in the way of the deal closing.

A Possible Way Forward

The CMA has signalled a possible route out of the impasse – if Microsoft and Activision choose to restructure the deal. This could lead to a fresh merger investigation, but it also means that the companies may need to give up some control of their cloud gaming business in the UK.

A Compromise Solution

Microsoft’s Xbox chief Phil Spencer wrote a memo to staff today, stating: "We remain optimistic that we will get our acquisition over the finish line… This extension gives us additional time to resolve the remaining regulatory concerns in the UK."

The $68.7 billion merger has been a complex and contentious process. However, with this new deadline, Microsoft and Activision may be able to find a solution that satisfies both parties.

Key Players

  • Microsoft: The tech giant is acquiring Activision Blizzard for $68.7 billion.
  • Activision Blizzard: The game developer is being acquired by Microsoft.
  • Competition and Markets Authority (CMA): The UK regulatory body has blocked the merger, citing concerns about competition in the cloud gaming market.
  • Federal Trade Commission (FTC): The US regulatory body is also opposed to the merger and has sued to block it.

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