Microsoft And Activision Extend Merger Deadline To October, "New Commercial Arrangements" Expected
Microsoft and Activision Blizzard have extended their merger deadline beyond July and into October.
The July 18 deadline for Microsoft to close its deal to buy Activision Blizzard has come and gone, but both parties have now agreed to extend their deadline to October 18 under new terms.
The three-month extension comes amid the appeals process in the UK, which blocked the deal over concerns around the cloud gaming market.
Microsoft and Activision Blizzard have extended the merger agreement deadline to 10/18. We're optimistic about getting this done, and excited about bringing more games to more players everywhere.— Phil Spencer (@XboxP3) July 19, 2023
Activision said in a note to press that the deadline with Microsoft was extended on the condition that Microsoft pay a higher termination fee if the deal doesn't happen and laid out other "new commercial arrangements."
"The recent decision in the U.S. and approvals in 40 countries all validate that the deal is good for competition, players, and the future of gaming. Given global regulatory approvals and the companies’ confidence that CMA now recognizes there are remedies available to meet their concerns in the UK, the Activision Blizzard and Microsoft boards of directors have authorized the companies not to terminate the deal until after October 18," Activision said. "We're confident in our next steps and that our deal will quickly close."
Under the terms of the original merger agreement, Microsoft would need to pay Activision Blizzard $3 billion if the deal didn't happen. But now that fee has risen to $3.5 billion if the deal doesn't close by August 29 and $4.5 billion if it doesn't resolve by September 15, Activision said in an SEC filing.
"The agreement also includes amendments to Activision Blizzard's commercial Xbox arrangements with Microsoft, valued at up to $250 million for each of fiscal years 2023 and 2024," Activision said.
Microsoft and Activision secured a partial victory earlier in July when the companies won a key court case with the FTC in the United States. After that, Microsoft and Sony finally came to terms to keep Call of Duty on PlayStation platforms for the next 10 years.