Microsoft and Activision Extend Acquisition Deadline to October 18

Microsoft and Activision Blizzard have announced an extension of their merging agreement deadline, which expired yesterday, July 18, to October 18. This extension will allow the two companies to continue their discussions with the UK’s Competition and Markets Authority, which blocked the deal in April over concerns about competition in the cloud gaming market.

Microsoft President Brad Smith said that this 3 months delay will “provide ample time” to clear out final regulatory issues. “We will honor all commitments agreed upon with the European Commission and other regulators and continue to work with the CMA on the issues raised in the UK. We are confident about our prospects for getting this deal across the finish line,” Smith said today

Together with @Activision, we are announcing the extension of our merger agreement to 10/18 to provide ample time to work through the final regulatory issues. We will honor all commitments agreed upon with the EC and other regulators and continue to work with the CMA on the…

— Brad Smith (@BradSmi) July 19, 2023

As part of this extended merger agreement, both parties have also agreed to incremental increases to the termination fee Microsoft will need to pay if the acquisition fails to close. The fee will now increase from $3 billion to $3.5 billion if the deal doesn’t close by August 29, and this will go up to $4.5 billion if it doesn’t close by September 15.

Microsoft’s proposed $68 billion acquisition of Activision Blizzard, which is the biggest acquisition in Microsoft’s history, is also the largest acquisition in the history of the video games industry. Microsoft signed various cloud licensing deals to get the green light in the EU, but getting the deal approved in the US and the UK has been more difficult. While the Federal Trade Commission failed to block the acquisition in the US, the UK’s CMA has agreed to re-open discussions with Microsoft.

“We’re optimistic about getting this done, and excited about bringing more games to more players everywhere,” Head of Xbox Phil Spencer tweeted today. If Microsoft is committed to resolving remaining regulatory concerns, the UK’s CMA recently extended its deadline for its final ruling to August 29.