The value of Activision Blizzard stock rose rapidly following Microsoft’s legal victory over the FTC. While Microsoft still has UK regulators to contend with, Microsoft and Activision Blizzard may be on track to close the deal before the July 18 deadline.
Microsoft announced its intent to acquire Activision Blizzard in January 2022 for $68.7 billion. Not only is it the most expensive deal in the game industry, but it will also elevate Microsoft to the third-largest gaming company in the world, surpassed only by Tencent and Sony. However, it’s faced opposition from regulators who fear that the deal will give Microsoft a monopoly on certain parts of the game industry. While EU regulators approved Microsoft’s acquisition of Activision Blizzard in May, the case is still under litigation in the US and UK.
The FTC had sought an injunction to delay the deal, but Judge Jacqueline Scott Corley ultimately ruled in favor of Microsoft, allowing the acquisition to go ahead. Activision Blizzard’s stock rose sharply at the announcement, increasing by about 11% this morning. The stock price dipped slightly in the afternoon but is currently sitting at around $91.26, an increase of about $8.50 from when the markets opened this morning. This also marks the most significant jump in Activision Blizzard’s stock price this year, surpassing the previous best of $86.73 per share in April. It is the highest its stock has risen since June 2021.
While Activision Blizzard’s investors have reason to celebrate, Microsoft stock hasn’t gotten as much of a boost, continuing a downward trend since prices peaked in June. Meanwhile, Microsoft still has UK regulators to contend with. Britain’s Competition and Markets Authority blocked the deal in April, but UK regulators are willing to negotiate with Microsoft, and the CMA has paused its legal actions against the technology company. The road may now be clear for the acquisition to finally go through. This comes right on time, as Microsoft will have to pay Activision Blizzard a $3 billion breakup fee if the deal isn’t closed by the July 18 deadline.
The FTC has not withdrawn its opposition to Microsoft’s acquisition of Activision Blizzard, with a separate trial scheduled for August. This hearing was to determine if the merger should be delayed until that trial takes place. However, while Judge Corley agreed the FTCs scrutiny was justified, she based her ruling on the grounds that the FTC had not demonstrated it was likely to win next month’s trial.
Source: ABC 7 Los Angeles