Microsoft and Activision Blizzard have announced a small delay before the acquisition can go through, as both companies agreed to extend the deal’s deadline to this October. The initial deadline for Microsoft’s acquisition of Activision Blizzard was set for July 18, but the legal issues faced by the companies forced them to delay their deal by a few more months.
Microsoft announced its intent to acquire Activision Blizzard for $68.7 billion in January 2022. This acquisition, the largest in gaming history, would bring the catalog of Activision Blizzard games to Xbox and provide Microsoft players with popular titles such as Call of Duty, Diablo, Warcraft, and Candy Crush Saga. Due to the size of this acquisition, antitrust bodies from major countries raised concerns regarding a potential threat to Microsoft’s competitors in the gaming industry, most notably Sony as PlayStation is the main competitor of Xbox. While several governmental antitrust bodies gave their green light for this acquisition, others were more hesitant. The U.S. Federal Trade Commission tried to block the Activision Blizzard acquisition to prevent Microsoft from hindering competition, and the U.K.’s Competition and Markets Authority wanted additional guarantees that Activision Blizzard games would remain available on other platforms than Microsoft’s.
The acquisition agreement between Microsoft and Activision Blizzard has been extended from July 18 to October 18, 2023, giving the two companies three additional months to close this deal. This new deadline comes with additional guarantees for Activision Blizzard if Microsoft wants to end the deal, as the termination fee payable to the studio increases from $3.0 billion to $3.5 billion if the transaction is terminated after August 29, and to $4.5 billion if the transaction is terminated after September 15. The new agreement includes amendments to some of the arrangements between Activision Blizzard and Microsoft, possibly regarding the availability of Call of Duty games on PlayStation and Nintendo Switch.
This decision to extend the deadline for Microsoft’s acquisition of Activision Blizzard comes a few days after the U.S. Federal Trade Commission’s appeal to block the merger was denied by the Ninth Circuit Court of Appeals. The legal challenges faced by the companies before being allowed to close their deal caused the need to push back the deadline so they can finish outlining the terms of this unprecedented acquisition.
The next step for Microsoft and Activision Blizzard is to find a way to appease the U.K.’s Competition and Markets Authority's concerns regarding unfair competition in the gaming industry. Once this solution is sorted out, nothing should prevent Microsoft from acquiring Activision Blizzard.
Source: Activision Blizzard