A few hours before the deadline for the takeover of Activision Blizzard by Microsoft, the FTC has seen the extension of its request for a temporary injunction rejected. Sony has decided to sign the contract to guarantee access to Call of Duty on PlayStation.
After 18 months of discussions, Microsoft’s takeover of Activision Blizzard seems to be coming to an end. The defeat of the FTC (Federal Trade Commission) has triggered a series of events for several days, as we approach the deadline written on the repurchase agreement, July 18, 2023.
The FTC chain of defeats
On July 11, the California federal court rejected the FTC’s request for an injunction to block the merger process between Activision Blizzard. The US competition authority tried to launch the appeal process, but it did not trigger a new temporary injunction.
In other words, since the expiration of the temporary injunction, Microsoft now has the right to proceed with the merger with Activision Blizzard anywhere in the world, except in the United Kingdom where the CMA continues to block.
PlayStation signs with Xbox
As a logical consequence of the defeat of the FTC and of a merger which now seems inevitable, Sony has agreed to sign the contract proposed by Microsoft to keep access to call of duty.
It was Phil Spencer, boss of Microsoft Gaming, who announced the signing of the agreement with PlayStation on Sunday July 16. The tweet is sparse in detail, but Microsoft has since confirmed it was a 10-year deal, like Nintendo’s. Now, if the merger between Activision and Xbox goes through, Sony is guaranteed to continue to receive call of duty until 2033.
All eyes are on the UK
The repurchase agreement between Microsoft and Activision Blizzard expires on July 18 at 11:59 p.m. California time, i.e. July 19 at 9:00 a.m. in Paris. At the time this article is written, we are therefore in the last 48 hours before the redemption expires.
Only the UK is blocking the process now. The CMA published a rejection of the takeover at the end of April 2023, and Microsoft has since launched an appeal procedure before the CAT, the competent court in the United Kingdom. Microsoft, Activision and the CMA agreed last week to pause that process to return to the negotiating table. A hearing is scheduled in the UK today from 3.30pm to discuss the takeover.
We learned this weekend at Bloomberg that Microsoft is considering selling the distribution rights of its cloud gaming games for the UK to allay the CMA’s fears. The latter only estimated a danger to come on the cloud gaming market if the merger took place.
When will Microsoft and Activision merge?
Several hypotheses are now emerging to reach the conclusion of this pharaonic redemption.
First, the CMA could rush to accept Microsoft’s new project in the UK, assuming that the sources of Bloomberg are correct, and the merger could take place within the next 48 hours. The CMA could also accept that Microsoft proceed with the merger in other countries pending a new judgment based on Microsoft’s new project for the United Kingdom.
Alternatively, Microsoft could ignore the UK and validate its merger in the rest of the world. This seems unlikely as it stands: the firm is very close to having the green light everywhere and this will amount to alienating a sovereign state.
Finally, there is another hypothesis that is emerging, the one that is feared by fans and people tired of this extended soap opera. Microsoft and Activision Blizzard could agree to extend the takeover contract for a few weeks, the time to put a definitive end to the procedures in the United Kingdom and the United States. In this case, the conclusion of the takeover would only happen in August or September.
One thing is certain, we should know more after the deadline of July 18 (July 19 in the morning in France).
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