Activision Blizzard Inc. agreed to give Microsoft Corp. three more months to iron out regulatory issues and close the biggest video-game deal of all time.
(Bloomberg) — Activision Blizzard Inc. agreed to give Microsoft Corp. three more months to iron out regulatory issues and close the biggest video-game deal of all time.
The $69 billion agreement between the two companies, originally struck early last year, was set to expire at 11:59 p.m. Tuesday in California. Now the companies will have until Oct. 18, according to a regulatory filing on Wednesday.
Microsoft also agreed to increased the amount it would pay to Activision in case either side terminates the deal to $3.5 billion from $3 billion after Aug. 29, and to $4.5 billion after Sept. 15. The companies have said they don’t plan to walk away and will continue seeking the final regulatory approvals needed for closing.
The deal, if completed, would marry the maker of the Xbox game console with the publisher of popular titles such as Call of Duty, forming a powerful union that regulators on both sides of the Atlantic feared would give Microsoft an unfair advantage in the $182 billion games market. Microsoft has said the deal will positively impact consumers by allowing the company to distribute more games across more devices and platforms.
“We’re optimistic about getting this done, and excited about bringing more games to more players everywhere,” Microsoft head of gaming Phil Spencer said in a Tweet.
The UK Competition and Markets Authority, which blocked the deal in April, remains the only major hurdle to sealing the agreement. The regulator has said the merger could harm the nascent market for cloud gaming. Last week, the CMA agreed to consider a restructuring of the acquisition, though it would need to conduct a fresh investigation into any resulting changes. It’s not clear how long that would take.
The companies are considering giving up some control of their cloud-gaming business in the UK as a way to clinch the deal, Bloomberg has reported.
The US Federal Trade Commission also sought to block the merger, although a California judge last week denied the commission’s request to halt the transaction from going forward. The FTC is appealing that decision.
In an updated merger agreement, the two companies also agreed that Activision may issue a one-time dividend of up to 99 cents to its shareholders before the deal closes. Activision had suspended its regular dividend earlier this year.
Activision also released its second-quarter results, showing net bookings rose 50% from a year earlier to $2.46 billion, topping analysts’ estimates for $2.32 billion. Adjusted earnings per share were $1.08, topping projections of 88 cents.
Activision shares were down less than 1% Wednesday morning in New York while Microsoft shares were little changed.
(Updates shares in last paragraph.)
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