Microsoft and Activision Agree To Extend Merger Deadline

Microsoft and Activision have announced that they have agreed to extend their merger deadline until October 18th 2023. The original deadline expired on July 18th 2023. It seems there are a few stipulations for the extension, with Microsoft having to pay a higher breakup fee should the deal not go close. They will pay $3.5 billion if the deal does not close by August 29th. Additionally, $4.5 billion if the deal does not close by September 15th. There is also an immediate dividend payment of $0.99 to shareholders.

The news comes on the back of Microsoft scoring its victory over the FTC in the United States. Also, the recent decision from the Competition Appeal Tribunal (CAT) to halt Microsoft’s appeal against the CMA’s decision to block the merger in the United Kingdom back in April. The CMA now being the last hurdle in getting the deal closed.

Both Microsoft and the CMA asked the CAT to halt the appeal proceedings due to both parties coming back to the negotiating table. With it widely being expected that Microsoft will offer the CMA a cloud gaming-based remedy to help ease their concerns. All in order to get the ABK deal over the line in the UK. Judge Marcus Smith made the decision to halt the appeal proceedings after a CAT Hearing on Monday, July 17th. 

What’s next?

Having personally viewed the proceedings, I very much sensed that both the CMA and Microsoft are now on sure footing with each other. Both parties very much want to get this deal over the line and that they can see a clear route in order to do so. Judge Marcus Smith also pressed the need for the CMA to ensure that they will consider the new merger proposals from Microsoft with both sincerity and haste. Given the discussions during the hearing and the case references used by both the CMA and Microsoft, I think we could certainly see Microsoft’s cloud gaming arm in the United Kingdom either sold or handed off to a 3rd party, with some news outlets reporting that EE could be the company in the frame for such a deal, in order to help appease the cloud gaming concern adopted by the CMA.

Another point worth noting here is that Sony, who was one of the biggest opposers of this merger, has now signed a binding 10-year agreement with Microsoft in order to keep Call of Duty on PlayStation. 

It seems that there is very much still an appetite from both Microsoft and Activision to get this deal over the line and at the moment. This deal is the closest it has ever been to completion. As long as Microsoft’s remedies are accepted, we might see this deal close by the end of August. Alas, we could finally see the end of a saga that has now spanned over 18 months.

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Lee Reid

Scottish video game enthusiast who is very passionate and a big believer in cloud gaming. Also loves to chat about video games.

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