Microsoft Corp is currently in discussions regarding extending its acquisition agreement with video game maker Activision Blizzard, which is scheduled to expire on Tuesday. This extension is aimed at overcoming the remaining regulatory obstacles standing in the way of their $69 billion deal. According to an insider familiar with the matter, the expiration of the contract does not automatically lead to the collapse of the deal; it simply grants either company the option to walk away from the transaction. However, Microsoft, the creator of the Xbox gaming console, is seeking an extension to ensure that Activision does not attract another potential buyer or have a change of heart, as per the source.
Currently, the specifics of the extension being negotiated and any potential financial benefits for Activision remain unknown. If no agreement is reached by the end of Tuesday, the companies will continue negotiating the extension. The source has requested anonymity due to the confidential nature of the matter. Microsoft and Activision have not yet responded to requests for comment.
An extension would provide both parties with more time to find a regulatory solution in the UK, the only major jurisdiction posing a barrier to the completion of what would be the largest acquisition in the gaming sector. Microsoft and Activision are actively engaging in discussions with the Competition and Markets Authority (CMA) to address its antitrust concerns. The CMA has expressed the view that Microsoft’s commitment to extend access to Activision’s highly successful “Call of Duty” franchise to competing cloud gaming platforms does not effectively safeguard competition in the market. In order to facilitate further negotiations with the companies, the CMA has extended its probe until August 29.
Last week, Microsoft signed an agreement with Sony Group Corp to ensure that “Call of Duty” remains available on Sony’s PlayStation console. Sony was one of the deal’s most vocal critics, fearing potential restrictions on consumer choice. On Friday, a U.S. appeals court rejected the U.S. Federal Trade Commission’s request to halt Microsoft’s acquisition of Activision, removing one of the final obstacles to the deal’s completion.
On Monday, Activision’s shares closed at $93.2, slightly below the $95-per-share deal price. This suggests that the majority of investors now perceive the deal’s completion as likely.
