Activision Blizzard and Microsoft Extend Their Merger Deadline: The Drama Continues

Faced with the expiration of the commitment to buy Activision Blizzard by Microsoft this Wednesday, July 19, the two firms are announcing extensions. They now allow themselves until October to finish convincing the British authorities.

The end of the tunnel is in sight for the takeover of Activision Blizzard by Microsoft. After the FTC’s failure to convince a federal judge to block the process in the United States, the United Kingdom is now the last brake preventing the two companies from merging. Despite the accelerated maneuvers undertaken, this last obstacle could not be lifted before July 17, 2023, the deadline for the commitment between the two companies.

From that date, Activision was free to exit the merger process, which would have resulted in a $3 billion fee from Microsoft. The latter therefore negotiated with Activision to extend the contract. The two companies today announced an extension until October 18, 2023.

The success of the takeover is increasingly certain

Now, Microsoft faces a $3.5 billion bill if the takeover fails between Aug. 29 and Sept. 15, and $4.5 billion if it fails between Sept. 15 and Oct. 18, 2023. is a now very reduced risk faced by Microsoft and Activision.

The takeover has been validated in most territories such as the European Union, China and Japan. In the United States, Microsoft and Activision must at this stage still face an appeal procedure from the FTC, and a second lawsuit in the administrative court, still by an attack from the FTC, the competition authority. American. In the first case, it is estimated that the procedure will have little chance of a positive outcome for the FTC, while the second should only have the right to a verdict in 2024. Only here, the procedure before the administrative court n is not suspensive for redemption. In other words, Microsoft and Activision will not have to wait until 2024 to start the merger.

Regarding the United Kingdom, the competition authority, the CMA, issued an unfavorable opinion in April. A blocking decision for the takeover. However, Microsoft should propose a new file with compromises likely to be accepted by the CMA. The latter has given itself until the end of August to issue its new opinion in an accelerated procedure. The appeal process launched by Microsoft and Activision regarding the first notice is on hold pending this second assessment. According to the media Bloomberg, Microsoft would have agreed to sell the distribution rights of its video games for the cloud gaming market. Remember that it is this emerging market of cloud gaming and the potential weight of the Microsoft Activision group which were a source of fear for the CMA.

In other words, if the takeover contract now covers until October 2023, Microsoft and Activision should probably be able to begin their merger before the end of August, as soon as the CMA gives the green light. We imagine that the Redmond firm would like to conclude its acquisition before Gamescom, the largest video game fair in the world, which will take place from August 23 to 27 in Germany.

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