Microsoft and Activision Blizzard said on Wednesday they would delay a $69 billion merger as the two companies scrambled for final approval from Britain’s antitrust regulators.
The new extension, due on October 18, indicates that the companies believe they will complete the deal but need more time to satisfy regulators’ concerns.
When Microsoft announced its plans to acquire Activision, the video game publisher, in early 2022, the two companies set a deadline of July 18 this year to close the deal. The revised agreement introduced an upward breakup fee that Microsoft must pay Activision if the purchase defaults, from $3 billion through Aug. 29, then grow to $4.5 billion if it doesn’t close by Sept. 15.
“We are confident this deal will likely reach the finish line,” said Brad Smith, Microsoft President, wrote on Twitter Wednesday.
Bobby Kotick, CEO, Activision, he said in a statement“While we still have concerns about the economy and growing industry competition, we remain focused on the long-term opportunities ahead and completing our merger with Microsoft.”
The antitrust scrutiny focused on whether consumers would be harmed if Microsoft, which makes the Xbox video game console and has an emerging game streaming platform, also owns the game publisher behind blockbusters like Call of Duty.
Three regulators ended up being the most important gatekeepers to the takeover. The deal received the green light from the European Union in May after Microsoft agreed to offer Activision games on other streaming platforms. But it faced greater opposition in the United States and Britain.
In December, the Federal Trade Commission sued to oppose the acquisition in the agency’s administrative court, arguing that Microsoft could keep Call of Duty away from Sony’s popular PlayStation console. And in June, the FTC asked a federal judge to delay the deal while the administrative process continued. That judge ruled against the FTC last week, and on Friday an appeals court denied the agency’s request to stop closing the deal.
Britain’s competition and markets regulator moved to block the deal in April, saying it could harm consumers who stream games online. Microsoft and Activision have appealed the result.
Last week, shortly after a federal judge rejected the FTC’s bid to block the deal, Microsoft, Activision and the British antitrust regulator said they wanted to pause appeals proceedings to see if they could negotiate an arrangement that resolved regulatory concerns. On Monday, the regulator told the court handling the appeal that there was a “realistic chance” that the talks would succeed. court Granted A two-month pause in appeal.
On Sunday, Microsoft said it had reached an agreement with Sony to keep Call of Duty on PlayStation for 10 years, settling the biggest concern the FTC has raised in court. The FTC usually withdraws its administrative case if it loses in federal court, but it hasn’t yet backtracked on its objections to Microsoft’s acquisition plans.
Adam Sattariano Contribute to the preparation of reports.