Microsoft in talks to extend Activision contract, overcoming hurdles
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7 months ago 04:34:13pm Television

Microsoft in talks to extend Activision contract, overcoming hurdles

New Delhi, July 18-2023, By IBW Team

microsoft

Microsoft is currently engaged in discussions to extend its acquisition contract with video game company Activision Blizzard. The existing agreement is scheduled to expire on Tuesday, and both parties aim to overcome remaining regulatory challenges related to their $69 billion deal, as revealed by an anonymous source on Monday.

The contract’s expiration does not automatically result in the termination of the deal; it merely grants either company the option to withdraw from the transaction. However, Microsoft, the maker of the Xbox gaming console, has been actively seeking an extension to ensure that Activision remains committed and is not enticed by other potential buyers, according to the source, Reuters reported.

Details regarding the terms of the extension and any potential financial benefits for Activision are currently unknown and under negotiation.

If an agreement is not reached by the end of Tuesday, the companies will continue negotiating the extension, as disclosed by the confidential source.

Both Microsoft and Activision have yet to provide comments or responses regarding this matter.
Extending the contract would grant the companies additional time to address regulatory concerns, particularly in the United Kingdom, the sole significant jurisdiction posing obstacles to the completion of this notable acquisition within the gaming industry.

Microsoft and Activision are actively engaged in discussions with the Competition and Markets Authority (CMA) in an attempt to propose potential remedies that would alleviate the antitrust concerns raised by the country’s regulatory body.

The CMA contends that Microsoft’s commitment to granting access to Activision’s highly valuable “Call of Duty” franchise on competing cloud gaming platforms would not effectively preserve market competition. In response, the CMA has agreed to extend its investigation until August 29 to allow for further negotiations between the involved parties.

Last week, Microsoft reached an agreement to ensure that ‘Call of Duty’ remains available on Sony Group Corp’s PlayStation console. Sony had been one of the most vocal critics of the deal, expressing concerns about potential limitations on consumer choice.

On Friday, a U.S. appeals court denied the request from the U.S. Federal Trade Commission to halt Microsoft’s acquisition of Activision, effectively eliminating one of the final hurdles to completing the deal.

As of Monday, Activision’s shares closed at $93.2, slightly below the deal’s per-share price of $95. This indicates that most investors now view the deal’s completion as highly likely.


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