Microsoft and Activision Blizzard said on Wednesday they were holding up a $69 billion merger as the two companies battled for final approval from British antitrust regulators.
The new extension, set for October 18, indicates that the two companies believe they will complete the deal, but need more time to satisfy regulators’ concerns.
When Microsoft announced its plans to acquire video game publisher Activision in early 2022, the two companies set a deadline of July 18 of this year to close the deal. The revised deal introduced an escalating breakup fee that Microsoft would have to pay Activision if the buyout fell through, of $3 billion through August 29, then rising to $4.5 billion if it doesn’t close by September 15.
“We are confident in our prospects of making this deal come to fruition,” said Brad Smith, president of Microsoft, wrote on Twitter.
“While we remain concerned about the economy and increasing industry competition, we remain focused on the long-term opportunities ahead and completing our merger with Microsoft,” Bobby Kotick, Activision CEO, said in a statement.
Antitrust scrutiny has focused on whether consumers will be harmed if Microsoft, which makes the Xbox video game console and has a fledgling game streaming platform, also owns the game publisher behind blockbusters like Call of Duty.
Three regulators ended up being the most crucial gatekeepers to the acquisition. The deal was given the green light by the European Union in May after Microsoft agreed to offer Activision games on other streaming platforms. But he faced greater opposition in the United States and Great Britain.
In December, the Federal Trade Commission filed a lawsuit opposing the acquisition in the agency’s administrative court, arguing that Microsoft could keep Call of Duty off of Sony’s popular PlayStation console. And in June, the FTC asked a federal judge to stay the settlement while the administrative process progressed. That judge ruled against the FTC last week, and an appeals court on Friday denied the agency’s request to stop closing the deal.
Britain’s antitrust watchdog, the Competition and Markets Authority, blocked the deal in April, saying it could harm consumers watching games online. Microsoft and Activision appealed the finding.
Last week, shortly after the federal judge rejected the FTC’s attempt to block the deal, Microsoft, Activision and Britain’s antitrust watchdog said they wanted to halt appeals proceedings to see if they could negotiate a deal that would resolve regulatory concerns. On Monday, the regulator told the court handling the appeal that there was a “realistic chance” the talks would succeed. the court granted a two-month pause on appeal.
On Sunday, Microsoft also said it had reached an agreement with Sony to keep Call of Duty on PlayStation for 10 years, resolving the biggest concern the FTC raised in court. The FTC typically drops its administrative case if it loses in federal court, but it has yet to back down from its objections to Microsoft’s acquisition plans.
satarian adam contributed reporting.