Microsoft and Activision have jointly decided to extend their merger deadline by three months to address "remaining regulatory concerns." The original closing date for Microsoft's $68.7 billion acquisition of Activision, announced in January 2022, was set for July 18, 2023. However, the companies have now agreed to a new deadline of October 18, 2023.
The merger agreement also specifies earlier deadlines of August 29 and September 15, at which points the termination fees payable to Microsoft will increase from $3 billion to $3.5 billion and $4.5 billion, respectively, should the deal not close.
Microsoft's Xbox chief Phil Spencer expressed optimism in a memo to staff that the acquisition would reach a successful conclusion. He noted that while they can technically close in the United States due to recent legal developments, the extension provides additional time to resolve regulatory issues in the UK.
The merger has been met with opposition from regulatory bodies in the U.S. and U.K., including the U.K.'s Competition and Markets Authority (CMA), which blocked the acquisition in April due to competition concerns. The US' Federal Trade Commission has also sued to block the merger, but a federal court judge dismissed the claims and ruled the regulator could not block the deal.
The European Union's competition commission approved the acquisition in May, leaving the U.K. decision as the only significant obstacle to the deal's completion. The CMA has, however, suggested a possible resolution if Microsoft and Activision choose to restructure the deal, leading to a fresh merger investigation.
In the meantime, the CMA's final decision that the acquisition would weaken competition in the cloud gaming market remains in place. Both companies are currently considering modifications to the transaction, as they seek a solution that will allow them to continue their operations in the U.K. market.