Microsoft has cleared most of the hurdles to complete its $68.7 billion acquisition of Activision Blizzard, but all efforts may still be in vain. The company may simply not be able to meet the deadline – under the terms of the contract it must be completed before July 18 and the company has yet to receive UK approval. But Microsoft still has some options.
This week, Microsoft won the right to complete the biggest deal in gaming in a US court – the court dismissed the US Federal Trade Commission’s (FTC) lawsuit and did not accept the appeal that followed that decision. However, the FTC can still file an antitrust administration lawsuit against Microsoft. While FTC chief Lina Khan has shown reluctance in the face of setbacks in the past, such as in the FTC v. Meta case* The authority then dropped its competition lawsuit. Should the FTC decide to continue the fight against Microsoft-Activision, an administrative hearing is scheduled for August 2, and a decision is unlikely to be made before the end of this year.
Microsoft continues to battle the UK’s Competition and Markets Authority (CMA), which blocked the deal back in April. Microsoft then appealed and prepared a process. But after the American decision, the CMA expressed its willingness to postpone the process and discuss new conditions under which the deal could be approved. The only problem is that the UK regulator has extended the review of the deal between Microsoft and Activision Blizzard to August 29, well beyond the July 18 deadline, despite promising to resolve everything faster.
According to analysts at Bloomberg Intelligence, objections to the deal by the UK antitrust authority pose a greater obstacle to Microsoft than possible claims from the FTC. It has been reported that Microsoft and Activision are considering relinquishing some control of their UK cloud gaming business to appease the CMA before the closing deadline set for July 18.
Microsoft has strong incentives to close the deal before the deadline, otherwise the deal could fall through and the company will have to pay Activision a $3 billion penalty.
Another option is to close the deal before the CMA appeal, but then Microsoft could face serious problems in the UK market, up to and including restricting the gaming department’s work. However, Microsoft can take risks, such cases occur in large transactions and often protracted legal disputes follow.
Eventually, Microsoft and Activision could agree to extend the deadline for closing the deal to give CMA a chance to reach an agreement. Such extensions are also not uncommon. In May, VMware announced that it had agreed to a three-month extension to complete its Broadcom acquisition bid as the $61 billion deal came under scrutiny by EU and UK regulators. At the same time, Activision CEO Bobby Kotick said during a US FTC hearing that the company would be forced to step out of the deal if an injunction were issued. But that was the case in the US.
A positive ending to this whole saga is also indicated by the fact that the New York Stock Exchange NASDAQ announced yesterday that it will be delisting Activision Blizzard before the market opens on Monday, July 17th. This suggests that Microsoft will close the deal before or shortly after.
* It is included in the list of public associations and religious organizations for which the court made a final decision to liquidate or ban activities on the grounds provided for in Federal Law No. 114-FZ of July 25, 2002 “On Combating Extremists”. has met activity”.