Microsoft's $69 Billion Activision Blizzard Acquisition Deadline Extended Amid Regulatory Challenges

Microsoft's anticipated $69 billion acquisition of Activision Blizzard, a publisher of video games, has raised regulatory concerns in the US and UK. The deal's deadline, initially this week, has been extended until October 18 while the two businesses work to fix the authorities' issues.

Microsoft President Brad Smith said the delay would allow them to handle last-minute regulatory issues and conclude the purchase. The extension has a larger termination price if the transaction is canceled, reflecting the severity of the situation.

With the prolongation, the termination fee—set initially at $3 billion—has been raised to $3.5 billion. The charge will increase to $4.5 billion if the transaction cannot be completed by September 15, according to a report from AP News. Both Microsoft and Activision previously agreed that any side might leave the merger if it was not completed by the initial date, which could result in paying the breakup fee.

Phil Spencer, the head of Xbox, announced the extension on Twitter and expressed hope for completing the agreement between Microsoft and Activision. Additional games will be available to gamers all around the globe.

CMA Extends Deadline Until Next Month

The primary obstacle is still addressing the issues brought up by the UK's Competition and Markets Authority (CMA), which halted the Microsoft Activision agreement due to worries about a cloud gaming monopoly.

The CMA extended the deadline for the Microsoft-Activision deal to reach a final judgment last week to consider a fresh proposal from Microsoft, Eurogamer reported. The corporation altered the situation to ease the CMA's worries, which resulted in an additional six-week extension till August 29.

Microsoft and Activision are upbeat about the deal's ultimate success, citing regulatory approvals in 40 nations as evidence of its advantageous effects on the gaming market and gamers.

According to sources, Microsoft's attempts to prolong the deadline are motivated by a desire to stop possible rivals from rushing in or Activision Blizzard from rethinking the agreement.

Despite losing a federal judge's verdict and a federal appeals court's order to stop the transaction, the Federal Trade Commission (FTC) has not announced if it will continue to oppose it. The two corporations may complete the Microsoft-Activision merger before the FTC's August in-house judge case.

Good Market Performance

Activision Blizzard announced good second-quarter results, exceeding market expectations because of the ongoing popularity of its "Call of Duty" brand, despite the regulatory obstacles. As a result of the revival of the "Diablo" brand, CEO Bobby Kotick expressed confidence in producing an excellent financial performance for the whole year.

Investors and industry professionals are awaiting the resolution of the regulatory issues while the deadline extension continues to decide the future of this significant gaming transaction. Activision's stock price didn't move much in response to the announcement, while Microsoft's stock price increased by 0.5% due to many price target increases from brokerages, including Barclays, as per a Reuters story.