It looks like Microsoft and Activision could wait just a little bit longer before they close their deal after all.
The two companies had been facing harsh regulatory scrutiny in both the US and UK. However, in most other countries and regions, including the EU, their merger was cleared. In many cases that clearance came without any other conditions to boot.
Their latest hurdle was the injunction filed by the FTC. That injunction was rejected by San Francisco, California District Judge Jacqueline Scott Corley. The FTC then tried to appeal, but that was also rejected by the 9th Circuit Court.
This clears them to finalize the deal before or on July 18, the closing date that Microsoft and Activision agreed on. However, they may end up delaying the deal themselves, as anti-climactic as that might be.
As revealed by HazzadorGamin on Twitter, Tom Warren of The Verge stated that the two were not going to finalize the deal this week. The reason? The CMA.
To be clear, the CMA cannot legally stop the two companies from completing this deal, which is occurring outside their jurisdiction. Rather, Microsoft and Activision are being mindful that it would not look good, with a particular focus on how future mergers and acquisitions could be closed.
The CMA was also a critic of the deal and decided to ‘prevent’ the deal in their region. Microsoft then applied for an appeal, and subsequently put pressure on UK politicians and swayed the UK public as well, to take their side on this acquisition.
As of right now, however, the situation between the two has also changed. Microsoft and the CMA have applied to suspend the appeals trial. They have started discussing other ways for Microsoft to address the CMA’s objections to the deal.
Microsoft wants to put their best foot forward in this situation. If Microsoft goes forward with more mergers and acquisitions in the future, they want to create an environment conducive to such deals.
Tom Warren opined that Microsoft may end up selling their cloud gaming business to a UK company, with the deal now closing within six weeks. The most likely candidate to purchase said cloud gaming business is UK telecommunications and ISP company EE.
As pointed out by DMOptions on Twitter, there is a clause in the Microsoft Activision merger agreement that allows the companies to extend their closing date. They won’t need to put this to a shareholder vote, but instead can be decided by the boards of both companies.
So Microsoft and Activision can very easily extend their closing date, and now, they also have a good reason to do so. Since they may feel comfortable that there are no real hurdles from closing the deal, they will want to make sure it goes over smoothly everywhere.
