UNITED STATES – The deadline for Microsoft’s USD69 billion acquisition of video game company Activision Blizzard has been extended as the companies seek to close a deal that has been challenged by regulators in the United States (US), as well as by the United Kingdom (UK)’s Competition and Markets Authority.
Microsoft believes that pushing back the deadline to October 18 will provide enough time to work through the remaining regulatory issues, said the company’s president Brad Smith.
“We are confident about our prospects for getting this deal across the finish line,” Smith said.
The extension comes with a bigger termination fee, should the deal be called off, and a number of other new agreements. Tuesday marked an important deadline for the deal announced 18 months earlier. Both Microsoft and Activision had agreed that either party could walk away from the planned merger if it hadn’t closed by then, triggering Microsoft to potentially have to pay a USD3 billion break-up fee unless both sides decided to renegotiate.
That termination fee has been increased to USD3.5 billion with the extension. If the deal does not close by September 15, it will increase to USD4.5 billion.
“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,” Activision Blizzard Chief Executive Officer Bobby Kotick said in a note to employees.
He emphasised that it’s already been granted approval in 40 countries, which includes those in the European Union, and he was confident the UK concerns would be resolved.
Microsoft spent this month working to resolve longstanding legal challenges from antitrust enforcers in the US and UK who argued the merger would harm competition.
The deal was effectively clear to go in the US this week, especially after the Supreme Court decided against hearing a last-ditch effort to block the takeover from gamers who have described themselves as fans of popular Activision titles Call of Duty, World of Warcraft, Overwatch and Diablo.
