Microsoft and Activision extend their merger deadline to October 18, also raising termination fee
After the original deadline expired on July 18, Microsoft and Activision Blizzard have now agreed to extend their merger agreement. This will allow the companies to negotiate with the UK regulator, which is the last stumbling block to closing the $68.7 billion deal.
According to a new SEC filing, Microsoft and Activision Blizzard entered into an agreement to not terminate the deal until October 18.
In addition to the new deadline, the companies raised the termination fee (will only be paid by Microsoft if the deal is eventually abandoned) to:
- $3.5 billion if the deal doesn’t close by August 29;
- $4.5 billion if the deal doesn’t close by September 15.
August 29 is also the day when the UK’s Competition and Markets Authority (CMA) will issue its final order on Microsoft’s proposed acquisition of Activision Blizzard. The regulator now needs time to review new remedies from the companies that should address its cloud gaming concerns that initially motivated it to block the merger.
“We will honor all commitments agreed upon with the [European Commission] and other regulators and continue to work with the CMA on the issues raised in the UK,” Microsoft president Brad Smith said.
Together with @Activision, we are announcing the extension of our merger agreement to 10/18 to provide ample time to work through the final regulatory issues. We will honor all commitments agreed upon with the EC and other regulators and continue to work with the CMA on the… pic.twitter.com/QZklZC20ZG
— Brad Smith (@BradSmi) July 19, 2023
“We’re optimistic about getting this done, and excited about bringing more games to more players everywhere,” Microsoft Gaming CEO Phil Spencer said in a statement.
Microsoft and Activision Blizzard have extended the merger agreement deadline to 10/18. We’re optimistic about getting this done, and excited about bringing more games to more players everywhere.
— Phil Spencer (@XboxP3) July 19, 2023
“The recent decision in the US and approvals in 40 countries all validate that the deal is good for competition, players, and the future of gaming,” Activision Blizzard CCO Lulu Cheng Meserve noted, adding that the parties are confident that the merger will “quickly close.”
The new agreement between Microsoft and Activision Blizzard implies that the companies hope to close the deal by August 29. However, it all depends on the outcome of negotiations with the CMA, as well as whether the UK regulator will accept the terms of the revised proposal, the details of which we have yet to see.
