In a strategic move to address lingering regulatory concerns, technology giant Microsoft and gaming powerhouse Activision Blizzard have jointly agreed to extend the deadline for the closure of Microsoft's proposed acquisition of Activision Blizzard from July 18 to October 18, 2023. The monumental merger, valued at an impressive $68.7 billion, promises to reshape the gaming landscape, but it has encountered hurdles with regulatory bodies both in the United States and the United Kingdom.
The extension comes after a painstaking 18-month journey of navigating through various regulatory obstacles that threatened to halt the colossal deal. While the acquisition has garnered approvals from numerous countries worldwide, the US and UK regulators, particularly the Federal Trade Commission (FTC) and the Competition and Markets Authority (CMA), raised concerns regarding competition and cloud gaming.
The FTC initially sought to halt the acquisition with a preliminary injunction, but after a five-day court hearing, the request was denied, paving the way for Microsoft to proceed with the deal in the US. Across the Atlantic, the CMA took issue with the merger, expressing concerns about the potential impact on the cloud gaming market. In response, Microsoft took a proactive approach and appealed the decision, presenting a modified merger proposal that includes remedies to address the CMA's apprehensions.
Both Microsoft and Activision Blizzard are optimistic that the extended deadline will provide the necessary time to address the remaining regulatory issues, particularly those raised by the CMA in the UK. As part of the agreement, Activision Blizzard shareholders will be entitled to receive $0.99 per share. The termination fee, which will only be paid by Microsoft if the deal is ultimately abandoned, has been increased to $3.5 billion if the merger fails to close by August 29, 2023, and $4.5 billion if it fails to close by September 15, 2023.
Microsoft's Gaming CEO, Phil Spencer, expressed unwavering confidence in the acquisition's completion, stating, "We're optimistic about getting this done, and excited about bringing more games to more players everywhere." The companies firmly believe that the merger will not only foster healthy competition and benefit players but also revolutionize the future of gaming.
Both parties are committed to working collaboratively with the CMA to address its concerns and finalize the deal. The CMA's agreement to grant a delay in the litigation process allows for a comprehensive review of the revised proposal's terms. Microsoft and Activision Blizzard are determined to expedite negotiations with the CMA, aiming to close the deal before the extended deadline, ideally by August 29.
While the regulatory journey has been complex, all parties involved remain steadfast in their determination to navigate the final stages successfully. The gaming community eagerly awaits the outcome, hopeful for the merger to come to fruition and unleash a new era of limitless gaming possibilities.
In conclusion, the Microsoft and Activision Blizzard merger stands on the cusp of completion, with the companies extending the deadline to diligently address remaining regulatory concerns. The success of the merger hinges on the outcome of constructive negotiations with the UK's Competition and Markets Authority. Both Microsoft and Activision Blizzard are resolute in their commitment to finalize the $68.7 billion acquisition, promising a groundbreaking transformation in the world of gaming.
