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On the evening of July 19th, according to reports, Microsoft and Activision Blizzard announced today that the two parties have agreed to extend the deadline for their $69 billion acquisition deal to wait for the results of negotiations with British regulators.
According to the original plan, the deadline for Microsoft to acquire Activision Blizzard was July 18. But today, the two sides agreed to extend the deadline to October 18.
Lulu Cheng Meservey, executive vice president of corporate affairs at Activision Blizzard, said: “This transaction has been approved in 40 countries, and the recent decision of the U.S. Court of Appeals shows that this transaction is beneficial to market competition, gamers and the future of the gaming industry.”
“Additionally, Microsoft and Activision Blizzard believe that the UK’s antitrust regulator, the CMA, now recognizes that there are remedies available to address its concerns. To this end, the boards of Activision Blizzard and Microsoft have given the two companies a mandate not to terminate the transaction until October 18.”
At the same time, both Microsoft and Activision Blizzard have agreed to higher termination fees and new commercial arrangements for the deal. If the deal doesn’t close by August 29, either Microsoft or Activision Blizzard will pay a $3.5 billion termination fee if they walk out of the deal. If not completed by Sept. 15, the termination fee would jump to $4.5 billion.
Obviously, the postponement of the transaction deadline is related to Microsoft’s ongoing negotiations with the UK’s Competition and Markets Authority (CMA). Earlier this year, the CMA announced it was blocking the deal due to concerns about the cloud gaming market. Subsequently, Microsoft filed an appeal.
Last week, after the U.S. District Court for the Northern District of California rejected an injunction application from the U.S. Federal Trade Commission (FTC), the attitude of the British CMA also changed instantly. “Microsoft and Activision Blizzard have indicated that they are considering how to revise this deal, and we are prepared to negotiate with them on this basis to reevaluate this deal,” the CMA said.
Earlier this week, the UK CMA said it would announce a final decision by August 29. Today, Microsoft and Activision Blizzard also set the date for raising the breakup fee on August 29, indicating that the two companies are confident that they will complete the transaction before that date.
In addition, Microsoft and Activision Blizzard are optimistic about completing the deal, according to an internal memo to Xbox employees from Microsoft’s gaming business CEO Phil Spencer today.
Last January, Microsoft announced the acquisition of Activision Blizzard for approximately $69 billion. After the transaction is completed, Microsoft will become the world’s third-highest revenue game company, second only to Tencent and Sony. Several regulators around the world have since launched investigations into the deal.
Manuscript source: Sina.com
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