After Microsoft and Activision Blizzard’s merger won the FTC case, the two parties extended their agreement in hopes the CMA would fall in line also.
Technically, the agreement ran out last Tuesday due to the self-inflicted time restraint the original merger had in place from both parties, but both parties between the $69 billion Microsoft and Activision Blizzard merger have decided to extend the agreement deadline until October 18 in hopes the CMA would fall in line with the FTC after their huge win in court last week. The UK’s CMA has been pushing back on the merger since April, and now that the FTC’s appeal has been declined on the stoppage of the decision, the CMA remains the final frontier to cross on the merger reaching a conclusion favourable to Microsoft.
Activision Blizzard CEO Bobby Kotick said “The Activision Blizzard and Microsoft boards have mutually agreed not to terminate the deal until after October 18″ with “Our merger is cleared to close in over 40 countries already, and we remain confident in resolving any remaining regulatory concerns in the UK,” confirming both parties are indeed waiting for the UK to agree on the merger, Kotick said in a statement on the Blizzard website.
Microsoft President Brad Smith echoed the same sentiment with, “We will honour all commitments agreed upon with the EC and other regulators and continue to work with the CMA on the issues raised in the UK. We are confident about our prospects for getting this deal across the finish line.” It’s worth mentioning that Brad Smith also included some vital pieces of information regarding the deal extension, including a clause where Activision is entitled to pay $0.99 per share to its shareholders. The rest of the revealed info from Smith can be seen below.
- Both parties have agreed that the deal termination fee is not subject to any condition other than failure to close.
- If the deal does not close by August 29, 2023 the termination fee payable by Microsoft if the agreement is terminated will increase from $3 billion to $3.5 billion. If the deal does not close by September 15, 2023, it will increase from $3.5 billion to $4.5 billion. Any termination fee will only be paid if the deal fails to close.
Judging by these details, if the deal doesn’t conclude by October 18, Microsoft could be on the hook for $4.5 billion, and that’s without the merger panning out. While the FTC appeal on the decision to allow the merger has been declined, there is still a little ways to go with the merger between Microsoft and Activision, especially where the CMA is concerned, so fans will undoubtedly hear more in the coming days regarding the massive deal.
