On Wednesday, Microsoft and Activision Blizzard agreed to postpone their merger agreement until October 18th. The two companies had agreed to finalize the transaction by July 18th, but due to complications from the US and UK government, they had to extend the date. Microsoft must take further steps beyond its original offer to satisfy the UK competition regulator.
On Wednesday, Microsoft and Activision Blizzard agreed to extend their merger deadline to October 18. The pair had originally planned to complete the transaction by July 18, however regulatory pushback from the U.S. and the U.K. caused a delay. If the deal wasn't extended, Microsoft could have been responsible for a $3 billion breakup fee. The new agreement includes an increased termination fee for each month the transaction is not agreed, going up to $4.5 billion by September 15. Furthermore, Activision's board has also agreed to offer a 99 cents per share dividend.
Microsoft and Activision have extended their deadline as the U.K. Competition and Markets Authority (CMA) delays its review of the deal until Aug. 29. The CMA had originally opposed the transaction in May due to worries over competition in the cloud gaming market. The U.S. Federal Trade Commission's effort to halt the deal was unsuccessful in court and as a result, the CMA has paused all litigation and proposed that Microsoft modify the agreement in order to address the regulator's concerns. The CMA said it would try to expedite the review process to meet its own Aug. 29 deadline, though whether the deal can be approved by then remains uncertain. Activision Blizzard CEO Bobby Kotick has expressed belief that the CMA will accept the remedies suggested by Microsoft, citing Microsoft's long-term agreements with Nintendo and Sony.
The CMA has declined to accept Microsoft's original proposed remedies concerning its takeover of Activision, as they were deemed too difficult to monitor and wouldn't have addressed the issue of a concentration of power in the cloud gaming market.Therefore, Microsoft must submit an altered offer to the CMA in order to obtain approval.This has prompted international regulatory attention, as it was feared that the acquisition could reduce the availability of Call of Duty on other platforms or impede its performance.Sony and other businesses in the same industry had spoken out about the possible impact that Microsoft's takeover of Activision could have had.
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