**Microsoft’s Acquisition of Activision Blizzard Deadline Extended Amid Regulatory Challenges**
Microsoft’s $69 billion acquisition of video game company Activision Blizzard has faced regulatory challenges in the U.S. and the U.K. As a result, the deadline for the deal has been extended to provide more time for resolving these issues. Brad Smith, Microsoft’s president, expressed confidence in closing the deal successfully.
**Extension Comes with New Agreements and Increased Termination Fee**
As part of the extension, the termination fee for the deal has been increased. Originally set at $3 billion, the fee has now been raised to $3.5 billion. If the deal does not close by Sept. 15, the termination fee will further increase to $4.5 billion. Additionally, several new agreements have been included in the extension.
**Activision Blizzard CEO’s Announcement and Confidence in Approval**
Bobby Kotick, CEO of Activision Blizzard, assured employees that the deal would not be terminated until after October 18. He noted that the deal has already been approved in 40 countries, including the European Union, and expressed confidence in resolving the concerns raised by the U.K. regulators.
**Microsoft’s Efforts to Resolve Legal Challenges**
Microsoft has been working diligently this month to address legal challenges from antitrust enforcers in both the U.S. and the U.K. These regulators have argued that the merger would harm competition. However, the deal received clearance in the U.S. this week after the Supreme Court declined to hear an appeal to block the takeover. Gamers who identified themselves as fans of popular Activision titles, such as Call of Duty and Diablo, made the last-ditch effort to halt the deal.
**Remaining Hurdle in the U.K.**
While the deal has progressed in the U.S., the U.K. remains an obstacle. However, it is expected that this obstacle will be overcome. Initially, the Competition and Markets Authority rejected the deal, but it later agreed to delay its final decision to allow for further negotiations with Microsoft. The judge assigned to the case approved the joint request to delay proceedings, with Microsoft’s attorney expressing gratitude for the swift process.
**Addressing Concerns and Deals with Competitors**
To address concerns about competition and loss of competition raised by regulators, Microsoft announced a deal with Sony. The deal ensures that Call of Duty remains on the PlayStation console for at least 10 years. This agreement provides a potential solution to one of the concerns highlighted by the U.S. Federal Trade Commission (FTC), which filed a lawsuit in December to stop the merger. The FTC’s next steps in fighting the takeover remain uncertain, but it is still possible for the two companies to complete the merger before a potential case set for the agency’s in-house judge in August.
**Extension Allows for Resolution of Remaining U.K. Regulatory Concerns**
Although the merger could technically be closed in the U.S., Microsoft’s head of Xbox division, Phil Spencer, stated that the extension would provide additional time to resolve the remaining regulatory concerns in the U.K. This demonstrates Microsoft’s commitment to addressing all regulatory challenges before proceeding with the acquisition.