Microsoft and Activision Blizzard have announced that they have both agreed to extend the merger agreement deadline to October.
This three-month extension was done due to the ongoing concerns from UK Regulators over the acquisition. The original deadline for the deal was July 18, and now, it has been moved to October 18.
Xbox boss Phil Spencer has said in a tweet that they are optimistic about getting the deal done and are “excited about bringing more games to more players everywhere.”
Because of this delay, should the deal extend past the new deadline, an updated termination fee will be paid by Microsoft. According to Activision’s Q2 2023 Financial Report, if the transaction is terminated after August 29, $3.5 billion will be paid to ABK, and $4.5 billion after September 15.
Check out the full statement below:
On July 18, 2023, Activision Blizzard and Microsoft entered into an agreement waiving certain rights to terminate the merger agreement if the merger has not been consummated prior to October 18, 2023. The terms of the agreement include an increase in the termination fee payable to Activision Blizzard from $3.0 billion to $3.5 billion if the transaction is terminated after August 29, 2023, and to $4.5 billion if the transaction is terminated after September 15, 2023.
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. The agreement further enables Activision Blizzard to declare and pay one regular cash dividend for fiscal year 2023 of up to $0.99 per share, prior to and not contingent on the closing of the transaction. Please refer to our Current Report on Form 8-K filed on July 19, 2023 for further detail.
Just recently, Microsoft won its case against the FTC for the acquisition, essentially clearing its case in the US. Shortly after, the company signed a binding agreement with Sony to keep Call of Duty on PlayStation consoles for 10 years.
It seems that the Microsoft and Activision Blizzard deal will push through eventually, and it really looks like just a matter of time before it is fully realized. Until then, we’ll have to wait if any curveballs may happen between today and the new deadline.