Devendra Kumar
Microsoft’s proposed acquisition of video game company Activision Blizzard has hit a roadblock, and the deadline for the deal has been extended to October 18. The companies are working to resolve regulatory issues in the US and the UK, with the UK’s Competition and Markets Authority (CMA) still having concerns. Despite this, Microsoft is confident in the deal’s prospects and believes the extension will provide enough time to address remaining issues.
Microsoft believes that its acquisition of Activision Blizzard will increase competition in the gaming industry, and it has already been granted approval in 40 countries, including those in the European Union. In a statement, Activision Blizzard CEO Bobby Kotick said that he was “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.”
However, the UK’s CMA has been a major obstacle in the deal’s progress. In June, the CMA initially rejected the deal, citing concerns about the loss of competition in the gaming industry. Microsoft has been working to address these concerns, and a judge has conditionally approved a joint request from Microsoft and the CMA to delay upcoming proceedings, enabling both sides to further negotiate.
Microsoft has also reached an agreement with Sony, the maker of the PlayStation console, to keep Call of Duty on PlayStation for at least 10 years. This deal addresses at least one of the concerns about loss of competition brought by the US Federal Trade Commission (FTC). The FTC has not said if it will continue to fight the takeover after a federal judge and a federal appeals court both denied its attempt to stop the deal from closing.
Phil Spencer, head of Microsoft’s Xbox division, said in an email to employees that the extension gives the company additional time to resolve the remaining regulatory concerns in the UK. Microsoft spent this month working to resolve long-standing legal challenges from anti-trust enforcers in the US and the UK, and it believes that pushing back the deadline will provide enough time to complete the deal.
The deal was originally announced in January 2022, and Microsoft and Activision Blizzard had agreed that either party could walk away from the planned merger if it had not closed by the original deadline, which was September 15. If the deal does not close by October 18, the termination fee will increase to 4.5 billion dollars. Despite this, Microsoft believes that the extension will provide enough time to complete the deal and is confident that it will be able to overcome the remaining regulatory hurdles.