Microsoft Negotiating To Renew Agreement With Activision: Report
On Monday, a reliable source revealed that Microsoft Corp is currently engaged in discussions regarding an extension of its acquisition agreement with video game manufacturer Activision Blizzard. The existing contract, valued at $69 billion, is set to expire on Tuesday. The purpose of this extension is to address any remaining regulatory obstacles that may hinder the completion of the deal.
Termination of the agreement would not automatically result in the deal collapsing, as it simply gives either company the right not to do the deal.
Nevertheless, Microsoft, which makes the Xbox game console, has sought to extend the deal to ensure Activision is not courted by another potential buyer or willing to change, the source said.
It was not immediately clear about the terms of the negotiated expansion and whether it would include more financially favorable terms for Activision.
The companies will continue negotiations on the continuation if they do not have an agreement by the end of Tuesday, says anonymity because the matter is confidential.
Microsoft and Activision did not immediately respond to requests for comment.
The extension would give the companies more time to find a regulatory solution in Britain, the only major jurisdiction that prevents them from completing the gaming industry’s biggest acquisition.
Microsoft and Activision are negotiating potential remedies with the Competition and Markets Authority (CMA), which they hope will allay its antitrust concerns.
The country’s antitrust regulator has argued that Microsoft’s commitment to provide access to Activision’s multibillion-dollar Call of Duty franchise to rival cloud gaming platforms would not effectively protect competition in the market. The CMA has agreed to continue the investigation on 29 August to allow for further negotiations with the companies.
Last week, Microsoft signed a deal to keep Call of Duty on Sony Group Corporation’s PlayStation console. Sony had been one of the harshest critics of the deal, arguing that it could stifle consumer choice.
On Friday, a U.S. appeals court rejected a request by the U.S. Federal Trade Commission to halt Microsoft’s purchase of Call of Duty maker Activision. The decision removed one of the last obstacles to the completion of the acquisition.
Activision shares closed at $93.2 on Monday, a slight discount to the $95 per share transaction price, indicating that most investors now viewed the deal as likely.
