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Microsoft and Activision Blizzard Extend Merger Close Deadline
The acquisition of video game maker Activision Blizzard by Microsoft has been given a new deadline to close of Oct. 18.
The two companies agreed to the new closing date after the initial deadline of July 18 had passed. Microsoft President Brad Smith announced the extended deadline in a tweet on Wednesday:
In a follow-up tweet, Smith said that the delay was so that Microsoft could "comprehensively and properly the UK's statutory requirements while sustaining fully our obligations across the EU."
In April, U.K.'s Competition and Markets Authority (CMA) said that it was blocking the proposed merger due to the potential monopoly the company may hold over the market, specifically cloud gaming through its Xbox Game Pass service. The additional three months will provide Microsoft time to properly address these concerns with the regulatory body in hopes of clearing the deal in the U.K.
The extended deadline also comes with an increase in termination fees, which Microsoft would have to pay to Activision Blizzard if the deal fails to close. If either party walks away from the deal by Aug. 29, Microsoft will pay Activision Blizzard $3.5 billion (up from the previously agreed $3 billion). And if the deal falls apart after Sept. 15, Microsoft will pay Activision Blizzard $4.5 billion.
This week's missed deadline comes on the heels of Microsoft clearing another regulatory hurdle. On July 11, a California judge confirmed that Microsoft could go through with the proposed merger after the Federal Trade Commission (FTC) requested a preliminary injunction to halt the deal. A U.S. Appeals Court ruling on July 14 then rejected a further attempt by the FTC to pause the deal.
The FTC said that it is weighing its options to continue to try to block the deal, while pressure from the Congress mounts. On Wednesday, 22 House Republicans sent a joint letter to FTC Chair Lina Khan, requesting that the FTC "drop this matter and refocus the FTC’s resources on work that supports the interests of American consumers."
The FTC's complaints, like the CMA's, concern a lack of choice in the marketplace by consumers, and points to the possibility that Microsoft could hold back Activision Blizzard products, like the Call of Duty franchise, from competing platforms and services.
Microsoft, in an attempt to address these concerns, signed a deal with competing platform Sony on July 14 to agree that the Call of Duty game franchise will continue to come to Sony's PlayStation platform for the next ten years.