Microsoft and Activision Blizzard now have until October to complete their merger.
More specifically, Activision Blizzard and Microsoft have jointly agreed to extend the merger agreement from July 18 to October 18, 2023, giving both companies roughly three months to sort through this purchase. As for why, Microsoft says it is “to allow for additional time to resolve remaining regulatory concerns.”
Microsoft vice chair and president Brad Smith tweeted, “Together with Activision, we are announcing the extension of our merger agreement to 10/18 to provide ample time to work through final regulatory issues. We will honor all commitments agreed upon with the EC and othe regulators and continue to work with the CMS on the issues raised in the UK. We are confident about our prospects for getting this deal across the finish line.”
Together with @Activision, we are announcing the extension of our merger agreement to 10/18 to provide ample time to work through the final regulatory issues. We will honor all commitments agreed upon with the EC and other regulators and continue to work with the CMA on the…
— Brad Smith (@BradSmi) July 19, 2023
Smith mentions Microsoft’s ongoing wrinkles in the U.K. where the Competition and Markets Authority blocked the acquisition in April citing concerns over cloud gaming. A California Judge denied the Federal Trade Commission’s move for a preliminary injunction in the U.S.-based regulatory agency’s case against the acquisition. The FTC then moved to appeal this decision and that was denied, giving Microsoft the greenlight to complete its purchase of Activision Blizzard in the U.S.
Despite receiving the greenlight from the European Commission, Microsoft must still contend with the CMA by either reaching an agreement or carving the U.K. out of the deal. It seems the latter is more likely because last week, shortly after winning the case against the FTC, Microsoft announced it was pausing its appeal efforts against the CMA to instead attempt to negotiate something satisfactory for both it and the U.K. regulatory agency.
Originally, the CMA had until July 18 to complete a potentially new ruling in this acquisition. However, the CMA extended this deadline by six weeks to August 29, 2023. With more time to sort through this case in the U.K., Microsoft is likely seeking an agreement with the CMA to get the greenlight in the U.K. as well.
As a result, Microsoft and Activision Blizzard missed the July 18 merger deadline yesterday. But now we know it’s because both parties have agreed to extend the deadline to October 18, which should be enough time to sort through wrinkles in the U.K. Of course, only time will tell.
Xbox head Phil Spencer adds on Twitter, "We’re optimistic about getting this done, and excited about bringing more games to more players everywhere.”
Activision Blizzard CEO Bobby Kotick sent the following letter to employees:
Team,
I know many of you have questions about our merger with Microsoft. I am happy to share that based on our continued confidence in closing our deal, the Activision Blizzard and Microsoft boards have mutually agreed not to terminate the deal until after October 18.
This merger is great for players, workers, and our business, and it will create opportunities to compete against companies with large talent pools, strong IP and complete control of their markets. Our merger is cleared to close in over 40 countries already, and we remain confident in resolving any remaining regulatory concerns in the UK.
I appreciate your patience through the process. As always, thank you for your continued dedication and work. I’ll share more updates as we have them.
With gratitude,
Bobby
To catch up on everything that’s happened so far, first read about Microsoft revealing it was acquiring Activision Blizzard for a colossal $69 billion, and check out this story about how the CMA blocked this acquisition in the U.K. over cloud gaming concerns. After that, read about how the FTC’s preliminary injunction request was denied by a California judge this week and then read about Microsoft’s new plans to negotiate something satisfactory with the CMA.
Following that, the CMA extended its deadline in its case with Microsoft over the company’s proposed Activision Blizzard acquisition. And, afterward, the FTC appealed to the U.S. Appeals Court for the Ninth Circuit, which was then denied. Sony then signed a 10-year agreement with Microsoft to keep Call of Duty on PlayStation platforms shortly after that appeal was denied. And now, we wait to see how everything shakes out in the U.K.
Do you think the CMA will reverse course? Let us know in the comments below!
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