Activision Deal Likely to Miss July Deadline as CMA Negotiations Extended by Several Weeks

Just when we thought it may be done, the Activision acquisition saga has taken yet another turn. Last week, the U.S. Federal Trade Commission’s attempt to block the Activision Blizzard deal before its July 18 deadline was firmly rejected, and another last-second delay attempt by the FTC was also shot down by a Ninth Circuit Court of Appeals judge.

Unfortunately, for those hoping we could perhaps finally put this story to rest, Microsoft still has the UK’s Competition and Markets Authority to deal with. Back in April, the CMA blocked the Activision Blizzard deal, a decision that Microsoft quickly appealed. In light of the FTC’s decision, the CMA announced they’d agreed to pause the appeal to give Microsoft a chance to propose additional changes to the deal that might get the approved, but it was unclear how long that pause might be.

Well, today the UK’s Competition Appeal Tribunal conditionally approved the request from Microsoft and the CMA to pause the Activision acquisition legal proceedings. A final decision on the pause will be handed down on Thursday, but it seems likely it will be granted. In light of the pause, the CMA has extended the date for its final decision on the deal by six weeks, from July 18 to August 29.

So yes, that means the Activision deal probably won’t make the July 18 deadline. If the deal isn’t done by July 18 both Microsoft and Activision have to option to walk away, and if that happens, Microsoft would have to pay Activision a $3 billion “breakup fee.” That said, if both Microsoft and Activision Blizzard decide they want to go ahead with the deal, they can negotiate an extension. It seems like both parties are fairly satisfied with the relationship at the moment, but I suppose a dramatic breakup could still happen tomorrow. Stay tuned!

The CMA’s objection to the Activision Blizzard deal wasn’t so much about the PlayStation vs. Xbox console wars, but the advantage Call of Duty exclusivity could conceivably give Microsoft in the growing cloud gaming market down the line. It will be interesting to see what concessions Microsoft may make to ease the CMA’s minds about that. Now they’ll have a few more weeks to figure it out.

You can keep up with the latest happenings in the Activision Blizzard acquisition saga here.