Activision, Microsoft extend deal deadline to secure UK approval

activision,-microsoft-extend-deal-deadline-to-secure-uk-approval
Activision, Microsoft extend deal deadline to secure UK approval

Activision Blizzard (ATVI.O) and Microsoft (MSFT.O) have extended the deadline for the close of their $69 billion deal by three months to Oct. 18. This extension is necessary as the companies work to secure UK approval for what is set to be the biggest gaming deal in history.

As part of the amended agreement, the deal termination fee has been increased from $3 billion to $3.5 billion if the deal does not close by Aug. 29, and to $4.5 billion after Sept. 15.

Originally, the companies had planned to close the deal by July 18. However, regulatory efforts in the US to block the takeover and Britain’s push to restructure it have caused delays.

The US Federal Trade Commission’s (FTC) attempt to temporarily halt the deal was denied twice, first by a federal judge and then by an appeals court.

Initially, Britain’s Competition and Markets Authority (CMA) had decided to block the deal. However, they reversed their decision last week and extended the deadline for a final ruling to Aug. 29 after the US court ruling left Britain as the sole opposition.

According to RushHourDaily, Microsoft is seeking to extend the contract to prevent Activision from being acquired by another company or changing their mind.

On Wednesday, Activision reported strong second-quarter earnings, surpassing market estimates thanks to the success of its “Call of Duty” franchise. CEO Bobby Kotick expressed confidence in delivering strong financial performance for the full year.

Following the news, Activision shares remained relatively unchanged, while Microsoft’s stock traded 0.5% higher after receiving price target increases from various brokerages, including Barclays.

Throughout the deal process, both companies have faced concerns from regulators in the UK and the US.

The FTC raised concerns about the potential negative impact on Activision’s game quality and player experience on rival consoles, such as Nintendo (7974.T) and Sony Group Corp’s PlayStation (6758.T). They also expressed worries about possible manipulation of pricing and changes to access terms or timing of Activision content.

The CMA questioned whether the deal could hinder competition in the cloud gaming industry, particularly in relation to subscription services like Xbox Game Pass. These services allow users to play games on any device and offer a wide selection of titles.

In response to these concerns, Microsoft has offered 10-year licensing deals to rivals after the deal is finalized. One such agreement was made with Sony Group (6758.T) to ensure that “Call of Duty” remains available on PlayStation, which is Microsoft’s biggest competitor in the gaming market.

The article was reported by Chavi Mehta and Yuvraj Malik in Bengaluru and edited by Devika Syamnath.

Thomson RushHourDaily adheres to The Thomson RushHourDaily Trust Principles.

About News Team

Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

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