Microsoft and Activision Blizzard Extend Merger Finalization Deadline
Microsoft and Activision Blizzard have agreed to delay the merger. A new deadline has been given for it to be finalized. The extra time will be used to convince the UK's CMA.
Yesterday passed the deadline by which Microsoft's acquisition of Activision Blizzard was to be finalized. In order for the parties not to have to renegotiate, and for the Redmond giant not to pay this holding company $3 billion for breaking the deal, both companies have set a new deadline for the merger's finalization.
- The new date was set for October 18, 2023.
- At the same time, the amount of the "penalty" that will be paid by the party that withdraws from the agreement has increased. If it is not finalized before August 29, it will amount to $3.5 billion. If, on the other hand, it does not happen before September 15 - $4.5 billion.
- The companies have also agreed to new commercial arrangements.
- In addition, Activision Blizzard is to "keep the company separate or certain of its assets or implement other lawful alternatives to finalize the merger."
The last point is particularly important, as it may help convince the UK's Competition and Markets Authority (or CMA) of the merger under discussion.
- After Microsoft won the case against the U.S. Federal Trade Commission (FTC), the CMA asserted that it is "prepared to consider any proposals from Microsoft to modify the terms of the deal in a way that would address the concerns in its final report."
- The change in attitude by the British regulator is significant because in April it did not approve the acquisition of AB by the Redmond giant, considering that it "could result in higher prices, more modest offerings and less innovation for players in the UK - especially when it comes to cloud-related services."
- Microsoft appealed against the decision in May. The case went to the UK's Competition Appeal Tribunal (CAT). Now that the parties have begun new negotiations, they have applied to the CAT to halt the appeal process (already accepted).
For the moment, the CMA is waiting for the Redmond giant's move. It is said, that it will submit a new proposal to the regulator for selling cloud services in the UK.
Representatives of Microsoft and Activision Blizzard seem full of optimism. Lulu Cheng Meservey, executive vice president of corporate affairs and communications director at AB, wrote on Twitter:
"The recent decision in the United States and approval in forty countries confirm that the deal is good for competition, players and the future of gaming. Given the global approval of regulators and the fact that the CMA now sees the availability of remedies that could address its concerns in the UK, the boards of Activision Blizzard and Microsoft have authorized the companies to break the deal only after October 18."
The head of the Xbox brand, Phil Spencer, is also not hiding his optimism - both in a published tweet, as well as in an email, which he sent to Microsoft employees today.
